The Eminent Domain

As the Times reported last week, the Conflicts of Interest Board has cleared former Deputy Mayor Dan Doctoroff to continue work on major development projects he oversaw while working as New York City’s development chief, even though he has gone on to work as president of Bloomberg L.P.

The 10-page waiver letter from the conflicts board grants Doctoroff extraordinarily wide privilege to continue working on his former projects. It permits him to continue serving on the boards of the Hudson River Park Trust and the Governor’s Island corporation, and to continue the work he began negotiating the creation of Moynihan Station. Doctoroff can work as an “unpaid consultant” on Queens West, the 5,000-unit housing development project for the East River waterfront.

Perhaps most stunningly, the former deputy mayor will “provide generalized policy advice and guidance on the implementation of PlaNYC,” the template for the future of New York City’s planning. That’s quite a job description, given that PlaNYC includes such sweeping recommendations as “Reclaim underutilized waterfronts” (”Today, New York City’s 578-mile waterfront offers one of the city’s greatest opportunities for residential development.”) Doctoroff will be involved in policy and land use decisions that open up billions of dollars of new development opportunities and shape the very fabric of the city.

As the conflicts board spells out in its memo, its waiver decision is based on careful reading of City conflicts-of-interest rules. That body of regulations, arising largely from the 1989 City Charter revision, is specifically meant to prevent personal enrichment of public officials who leave for the private sector, taking advantage of their special access to government by way of contracts, franchises and other favors from the public treasury. Such corruption, after all, scarred New York City during the Koch Administration and demanded forceful steps toward prevention.

But the authors of the City Charter revision apparently didn’t envision that public power could be turned to ventures with much higher stakes than steering contracts for parking meters and cable franchises to buddies from the old neighborhood.

Well, here we are. New York City, like any local government, has extraordinary power through land use decisions. And what we saw from Doctoroff during his time in office was consistent support for the objectives of real estate developers as a kind of proxy for the public interest. In place of any systematic assessment of public benefit, we had an embrace of the general principle that the City’s job was to maximize revenue and rents through big-ticket development projects that supplant more modest entrepreneurship. So Willets Point’s auto shops are giving way to plans for a convention center, hotel and luxury housing complex. In place of the Bronx Terminal Market and its independent vendors we’re getting a retail megaproject from the Related Group, which the NYC Economic Development Corporation also just named to turn the Kingsbridge Armory into a similar retail hub for the north Bronx.

Related CEO Stephen Ross and Doctoroff go way back and worked closely together on New York City’s Olympics bid. Back when Doctoroff was still an investment banker, Ross guaranteed a $4 million personal loan from Doctoroff to the 2012 Olympics committee. When Doctoroff became New York City’s economic development chief in 2001, the Conflicts of Interest Board explicitly permitted him to continue working with Ross, because as far as it was concerned the two men did not “have a business or financial relationship.”

Perhaps, according to the narrow scope of how the Conflicts of Interest Board is instructed to look at such relationships. But fundamentally Doctoroff, Ross, and other major developers have a set of interests that stands increasingly apart from the interests of New York City’s population as a whole. With each passing year New York is becoming two cities, in which the wealthy are becoming wealthier and middle and lower-income New Yorkers are losing ground.

The retail jobs these new projects will create don’t pay a living wage. EDC has generally refused to make firm commitments for affordable housing. Despite the Bloomberg administration’s strong rhetoric against corporate subsidies, major developments routinely win substantial tax breaks without enforceable commitments to producing jobs or other public benefits. And so on.

As Bloomberg heads toward his last year in office, it’s high time that we start asking how members of his administration ought to conduct themselves once they go back to the private sector. Otherwise New York will end up with a permanent, unelected government that claims to represent the public interest but has no legitimate claim to that power — only an interest in continuing to promote high-end real estate development whatever the broader consequences.