Wednesday, March 28, 2012

You Say Quid Pro Quo, I Say Coasian Bargaining

Today's Boorklyn Paper has uncovered that the Domino Sugar factory developer, who plans on turning the complex into 2,200 residential units though the project is currently suffering some setbacks, has paid local community groups about $100,000 over the past few years. Then, ESCONDALO!, these groups have supported the project. From the article:
Community Preservation Corporation Resources — which isfighting to avoid foreclosing on the massive waterfront plot where it hopes to build 2,200 apartments and retail space — doled out donations of between $9,000 and $30,000 to organizations that subsequently backed the Domino project from February 2008 to December 2009, months before its campaign to rezone the site, court filings reveal.
The currently cash-strapped developer says the donations, which it calls “public reputation” money, simply prove that it is invested in the neighborhood. But attorney and civic watchdog Norman Siegel said the donations suggest an instance of quid pro quo. 
“If the developer was giving community groups money five or 10 years before their mission, that would be one thing, but if the developer is giving money for the first and perhaps the last time, it raises the question whether the donor is buying recipients support and it raises questions about the community groups themselves,” said Siegel. 
...
After the organizations received the checks, members of Southside United, Catholic Charities, El Puente, and Churches United attended several contentious public hearings on the Domino plan, showing their support for a project that would rezone the 11-acre Kent Avenue site and bring 660 units of below-market-rate housing to the closed plant.
So the attorney says this is bad because of the timing, where the developer was clearly trying to buy support. To which I ask, who cares? The community groups value cash (and relatively small amounts of it) more than they value preventing the development. This is an example of how flexible the zoning code actually is. Perhaps the payments are increasing the overall cost of development, but in this case not by much since it is a $1.2 billion project. I understand that quid pro quo looks shady, but this can also be seen as compensation for any harm caused by the development (which can be loosely interpreted as Coasian bargaining). These weren't hidden transactions, so I'm not sure where the outrage is supposed to come in.
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