Ground Zero: $2.7B money pot
LMDC pouring fed dollars into site with no results
http://www.nydailynews.com/12-12-2005/news/special/story/373106p-316455c.html
This series was reported and written by
the Daily News Investigative Team: RUSS BUETTNER, HEIDI EVANS,
ROBERT GEARTY, BRIAN KATES, GREG B. SMITH
and Assistant Managing Editor RICHARD T. PIENCIAK
Stefan Pryor surveys the panorama from the window of his 20th-floor headquarters across the street from Ground Zero.
The president of the Lower Manhattan Development Corp. points with pride at the sole building to go up on the site since the terrorist attacks four years ago 7 World Trade Center, which has attracted no tenants.
He indicates with a sweep of his hand where the Freedom Tower, the museum complex and the performing arts center will rise.
Someday.
But for now, the view from the LMDC's office at 1 Liberty Plaza is of a yawning hole.
It is a pit into which the LMDC pours money: more than $2.7 billion in federal dollars earmarked for Ground Zero and the neighborhoods around it.
Gov. Pataki formed the city-state agency in the aftermath of 9/11 to help plan and coordinate the rebuilding and revitalization of downtown Manhattan.
The LMDC is funded by the federal Housing and Urban Development Department $2 billion in community block grants, and $783million in grants for restoring utility infrastructure and aiding businesses that "suffered disproportionate loss of life" in the terrorist attack.
From the start, the LMDC has been a magnet for controversy.
Pataki created the agency without approval from the Legislature in November 2001 four days before elections.
Fellow Republican Mike Bloomberg, who was soon to begin his first term as mayor, said he didn't think the agency was necessary. And Assembly Speaker Sheldon Silver, the state's top Democrat, immediately branded it "a partisan proposal."
The agency's mandate is to "alleviate existing conditions that pose a serious and immediate threat to the health or welfare of New York City or meet community development needs resulting from Sept. 11, 2001."
But the feds have given the LMDC unprecedented latitude at least 14 separate waivers to HUD rules, regulations and standard policies. Among them is an exemption that replaces the scrutiny of public hearings for funding proposals with a two-week period of public write-in comment.
"Separation of powers is fundamental to democracy and should be applied even in the most difficult and dire circumstances," said City Councilman Alan Gerson, a frequent critic who represents neighborhoods around Ground Zero. "Here you have legal loopholes. There is no input from the legislative branch, no direct hearings involving the public. That is the LMDC's central flaw."
It is a flaw that tends to favor big business.
The agency's Business Recovery Grants provide the best example. Intended to revitalize crippled small firms, they were capped at $300,000. But because they were based on companies' prior revenues rather than on need, the largest grants went to the companies that made the most money before 9/11.
More than a third of the Business Recovery Grant money has gone to law firms, investment companies and financial traders, a Daily News review of the agency's records show.
Since its inception, the LMDC has dispensed $564 million in Business Recovery Grants, pumped $320 million into job creation and retention and appropriated $50 million to retain and attract small firms to the area.
Additionally, it has allocated $280.5million to families that agreed to sign two-year apartment leases in lower Manhattan.
But the broad interpretation of its mandate has also allowed the LMDC to pay out some $57 million on elaborate festivals, advertising for tourist attractions, the redevelopment of 16 city parks and the bolstering of cultural activities.
Millions more have been allocated for studies of a proposed rail link to JFK Airport, traffic improvements in Chinatown and a plan to transform Fulton St. into a retail, arts and entertainment corridor.
Meanwhile, businesses are struggling in Tribeca, the office vacancy rate south of Canal St. is 11.2%, compared with 6.5% just before 9/11, and many of Chinatown's garment factories, which employed thousands before the attacks, remain closed.
Several of the LMDC's main efforts creating a memorial to those who died in the terrorist attacks and building a museum complex and a performing arts center at Ground Zero remain stalled.
The cornerstone for the Freedom Tower was laid on July 4, 2004. But the planned 1,776-foot structure radically redesigned after the NYPD raised security concerns hasn't risen an inch.
In September, after months of recriminations and angry demonstrations at the site, Pataki preemptively booted the International Freedom Center from Ground Zero and forced out the controversial Drawing Center, the two cultural anchors at the site.
LMDC board member Roland Betts, a business partner of Freedom Center founder Tom Bernstein, resigned in a huff, saying, "The LMDC's ongoing role has been severely marginalized." He also questioned whether the agency has a future. Betts' resignation left the board at half its allotted 16-member strength.
Last month, Bloomberg tapped as members two deputy mayors, budget guru Marc Shaw and economic development chief Daniel Doctoroff; two commissioners, Finance Commissioner Martha Stark and Planning Commission chief Amanda Burden, and two respected businessmen, William Rudin, chairman of the Association for a Better New York, and Lawrence Babbio, president of Verizon Communications, who helped restore communications to lower Manhattan after 9/11.
Pataki picked three powerful loyalists: Charles Gargano, chairman of the Empire State Development Corp., the LMDC's parent agency; James Kallstrom, former New York FBI boss and the governor's counterterrorism chief; and lawyer Robert Douglass, chairman of the Alliance of Downtown New York and a former Port Authority board member.
Until recently, Pataki, who remains wedded to maintaining the area as a predominantly commercial district, held sway over the rebuilding effort. But Bloomberg has vowed to put his stamp on Ground Zero and is pushing hard for more residential development. The appointment of political heavy hitters to the board presents an opportunity for both sides to resolve their differences and breathe new life into downtown redevelopment. Or it may just result in a clash of the titans.
Meanwhile, the LMDC continues to pay a whopping $47,000 a month in rent for its 1 Liberty Plaza headquarters.
And the view from Pryor's window hasn't changed.
Originally published on December 8, 2005
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FEMA's 9/11 grief money misused
As the government hunted for terrorists after 9/11, federal grief counseling funds were spent to assist Arab men as they were fingerprinted and questioned by U.S. authorities in downtown Manhattan.
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