The Gulch – Who Do You Believe? Who Really Benefits?

Moderator Karen Greer, Mayor Bottoms, and CIM Advocate Team.

Atlanta Mayor Keisha Lance Bottoms held a community forum to hear from residents due to opposition to The Gulch $5 Billion redevelopment plan proposed by California developer CIM.  The Mayor came in, took her seat and left after the Forum.  While she read an opening statement and answered a couple of the audience questions (that were read by the moderator), she was never seen engaging with residents.  No pictures. No handshakes. Nothing.

The plan which the City Council refused to vote on, until they have more time to review the 600 page document recently delivered to their homes, has residents furious.

Discussing 600 page Gulch Proposal with another opponent at Mayor’s forum.

Most residents were not allowed in the forum because City employees and a group of folks in green t-shirts, supporters  of the CIM proposed Gulch deal, took up most of the seats.  How is that really a forum for residents?  The overflow room was filled with residents upset they could not get in.

One of many ATL police officers after forum as GA Stand Up Exec. Dir., Deborah Scott, shares her opposing view with reporter.

In opening rules, outlined by moderator Karen Greer, attendees were told we would be removed by police officers, stationed around the room, if we got out of line (paraphrase).  I have attended many controversial forums/town halls, all across the country. Never have I heard those words.  Despite that, there were a few times when folks yelled in disagreement to what was being said.

Why are residents furious?  Well, after so many other “good deals” and promises that include:

– The original Braves Stadium & Turner Field

– Friendship Baptist Church & Mt. Vernon Baptist Church buyouts

– Falcons Stadium, Mercedes Benz (MB) Stadium & their $23 million bridge across Northside Drive

Karl Barnes (white jacket) ATL native and GA Tech alum among few residents who got into the Mayor’s Gulch Forum.

Each of these deals were also “good deals”  for the community and now we are all on the hook for cost overruns (the original MB bridge cost was $10 million. Several months later, the cost rose to $23 million with $1million in lights.).

Each time, residents are on the hook despite their elected officials assuring them, ‘it is good for Atlanta because it will bring jobs’.  Well, from what most reports and articles reveal, the minimum wage, temporary stadium jobs are what residents can verify.  No one can verify any substantial contractor or management jobs for residents.  However, residents continue to be displaced and given empty promises.

With a severe shortage of affordable housing units in Atlanta, each “good deal” drives out current residents while paving the way for new residents in homes priced out of reach for most.  Being the number one U.S. city for income inequality, there are only two places for most ATL residents to move:

1) further from the city with no or limited access to public transportation

2)  under an I-20 bridge with other homeless people

If a portion of our tax dollars could be used, as many advocates have asked, for:

– programs to repair/update homes of current residents,

– a program to “grandfather” current residents’ from tax increases.

– more affordable housing units than Invest Atlanta and the BeltLine can currently deliver.

That would give thousands of residents access to reasonable and affordable housing units.

Alvin Kendall, local attorney, gives the project overview as the Mayor Bottoms looks on.

Alvin Kendal, City of Atlanta liaison for the CIM Project gives a complicated presentation without a power point.  More on Kendall and his conflict of interest on this project from the AJC at:  https://www.ajc.com/news/local-govt–politics/watchdogs-question-rec-authority-leader-hiring-for-gulch-legal-work/QOvTwH6RnByIyAzlXvfRfL/

Much of the information he gave failed to give the whole story of the 30 year tax consequences to residents, Atlanta Public Schools (APS) and Fulton County Commissioners.  Three entities, ATL City Council, APS and Fulton County have to approve the plan for it to materialize.

Joe Beasley at podium at last week’s four hour long City Council Work Session attended by only half of the Council.

You see, I also attended last week’s City Council Work Session with “CIM Armani suit-wearing lawyers”, as former Senator Vincent Fort describes them.  Above, Internationist human rights activist, Joe Beasley, speaks against The Gulch Project.

If programs and legislation can be passed to benefit big corporations and stadium owners, why not for residents so they will not be driven out of their homes?  Is that too much to ask for while these corporate folks get to use “our” hard earned tax dollars?  Residents can make a change when they VOTE  in EVERY ELECTION.

Why is it that planners and people, including most of our elected officials, usually go into neighborhoods and tell them “what is best for them” and “how” their communities should look?  Even when Town halls are held, case in point, as with planning for MLKing Jr. Blvd, the neighborhood clearly objected to putting in medians.  This both limited left lane turning for cars and fire trucks.  Hmmm.

As WAOK Radio Host Derrick Boazman shared, ‘this Mayor’s Forum was not genuine and she is not standing up for the best interest of residents who elected her’.  Despite having a hand full of questions, Greer only read about 10-12. Most of them were not answered.  Real audience members were frustrated and began to shout out in frustration causing commotion.  Meanwhile the mayor sat with an unchanged expression.  And, to top it all off, most of us were shocked when the forum seemed to abruptly end.  Most of the time was not used to answer questions, but to give Gulch proposal rhetoric about how good this deal is for Atlanta.  If it is that good, tell the truth, answer all questions, and stop rushing.

Registering & educating voters at GA State MARTA Station. Back of t-shirt reads, “Register to Vote”.

So how do Atlanta residents and residents across the nation get control of their neighborhoods and protect them from predatory developers?

Glad you asked.  The short answer is to unite to vote out those who do not favor the residents who elected them.  And, to vet and fund candidates. Do not wait to see who runs.

On Tuesday, November 6, residents can take their power back by not just voting.  Everyone also needs to educate themselves on the 20 plus items on Georgia ballots (use Google, discuss with friends), BEFORE Election Day, so you can vote down the entire ballot with confidence while encouraging friends and family to do the same. Print a sample ballot from:  www.mvp.sos.ga.gov

In the meantime, those who are in office may be able to be recalled when they do not represent their voters. In the words of Sean King, contributor to the Tom Joyner Morning Show and Black America Web, “When we organize, we win!.”

 

Lots of people hanging around after Mayor’s Gulch Forum. Sign reads “Red Light The Gulch”.

So, it is obvious that Atlanta residents did not get their questions answered at the Mayor’s Forum.  So no transparency.

Who do you believe about The Gulch Plan?  The Armani suit-wearing attorneys who represent CIM, a firm with no Blacks on their executive team (according to their website http://www.cim.com)?  Who benefits?  You decide. You can make sure your voice is heard:

1) Organize a protest big or small.

2) Contact Mayor Bottoms at (404) 330-3100 or email from this link:

https://www.atlantaga.gov/government

3) Contact EVERY City Council Member, not just yours. Keep in mind, three are at-large or citywide :  Bond, Dickens, and Westmoreland.  If you do not know the name of your council member, ask when you call (404) 330-6030 or check this link for their individual contact info:

http://citycouncil.atlantaga.gov

 

(1. Also see my earlier blog on The Gulch.

2. Please let me know if you see errors. Another sets of eyes is always good!)

 

 

 

The Gulch Project Analyzed by AJC

The cost to Atlanta tax payers for the proposed Gulch Project initially was $1.2 Billion.  Now the number has climbed to $1.7 Billion.  As with most construction projects, the amount will grow…and be blamed on cost over runs.

https://epaper.ajc.com/html5/reader/production/default.aspx?pubname=Atlanta%20Journal-Constitution&edid=74bcedfd-ccd2-434d-84e7-fd09f032634d&pnum=1

As the City Council tries to read and comprehend the 600 page document known as:  the Atlanta City Council Legislative Package, Mayor Keisha Lance-Bottoms and CIM (the California developer), are in a big hurry to close this “good” deal.  As I put on my former banker hat, one thing I know for sure is that when people try to rush things, mistakes are made.  If this really is a “good” deal, give City Council members a chance to review and analyze the massive 600 pages from CIM, the developers on this deal. Council members need to understand the package and be able to:

1) get their questions and concerns answered,

2) fully understand the package,

3) determine if it really is a good deal,

4) revise the affordable housing section to make it truly affordable for ATL Westside residents, and not use Sandy Springs-Marietta income numbers

5) be able to explain their vote to their constituents,

6) vote in the best interest of their constituents.

There are three entities that have to sign off on this deal: Atlanta City Council, Atlanta Public Schools and Fulton County.  On Monday, September 17, protesters are expected to converge on the Mitchell Street side of City Hall before the scheduled 1:00pm City Council meeting.

With the recent revealed ties that CIM has to Jared Kushner and President Trump, this deal may be in trouble.  See the link and article below.

https://www.scpr.org/programs/take-two/2017/05/26/57043/la-based-cim-group-ties-with-kushner-and-trump-wor/

For your convenience, I have copied the full WNYC May 2017 article.  Though somewhat long, it is an easy and jaw-dropping read!  Please leave your comments on his post.

Donald Trump and Jared Kushner Meet With Business Leaders, January22 2017
( Pablo Martinez Monsivais/Associated Press / Associated Press )

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May 25, 2017 · by Andrea Bernstein and Ilya Marritz

The Watchtower in Brooklyn Heights is one of the most noticeable edifices in New York. It’s a complex of buildings on a bluff above the East River, with a sign on top that flashes the time and temperature. It used to be the world headquarters of the Jehovah’s Witnesses.

But today, workers are preparing to give it a makeover. Like so much else in Brooklyn, the Watchtower has been sold to developers. It changed hands last August, shortly after Donald Trump accepted the Republican nomination for President.

The timing is relevant, because the buyer was Trump’s son-in-law, Jared Kushner. At $340 million, Kushner’s purchase of the Watchtower was one of the biggest real estate transactions in Brooklyn history.

Kushner didn’t buy the Watchtower alone. He had help from a company called CIM Group, a private equity firm based in Los Angeles. Over the years, documents show, CIM has done at least seven real estate deals that have benefited Trump and the people around him, including Kushner. Those deals included stabilizing the scandal-plagued Trump SoHo hotel, a key Manhattan holding for Trump and his children Ivanka, Eric, and Donald Jr.

At the same time, records show, CIM Group, with approximately $19.7 billion under management, has pursued an array of lucrative government contracts, pension investments, lobbying interests, and a global infrastructure fund, all of whose fortunes could benefit from a Trump presidency.

While both Kushner and Trump have distanced themselves from their businesses, neither man has divested. Ethics experts including Kathleen Clark of the Washington University School of Law say that because of the two men’s ongoing business interests, the web of connections with CIM is troubling, even if no laws are broken.

“Trump gives new meaning to the idea what’s good for Donald Trump is apparently good for America,” Clark said. “He doesn’t actually seem to have a conception of the public interest outside of himself or his company or his family. That’s astounding.”

The White House declined to comment for this story, but in the past has defended Trump and Kushner’s business ties, saying they’ve been vetted and are in compliance with laws and regulations. CIM declined to comment on potential conflicts.

What is CIM?

CIM Group is certainly known at the top echelons of New York real estate. But the company itself — its character, its founders — seem to leave few traces beyond the properties in which it invests.

“CIM stands out as being very secretive,” said Konrad Putzier, a reporter for the Real Deal magazine and website who has covered the company for several years. “The fact that we don’t even know what CIM stands for says it all.”

A spokesman said in an email “CIM stands for CIM…that is all.”

CIM was founded in Los Angeles in 1994 by Shaul Kuba and Avi Shemesh, two Israelis, and Richard Ressler, a former New Yorker with private equity in his family — his brother Tony Ressler co-founded industry giant Apollo Global Management with his brother-in-law, Leon Black.

CIM’s strategy is to get good returns for investors by investing in undervalued urban real estate. The firm quickly became known in California for courting influential politicians and donating tens of thousands of dollars to a series of statewide political action committees.

In 2004, the firm acquired a package of properties that included the Kodak Theatre (now the Dolby Theatre) in Hollywood, where the Academy Awards are held. They purchased the real estate at a deep discount, after the previous owner ran into financial difficulties.

A few years later, CIM persuaded the city of Los Angeles to arrange a $30 million HUD loan to reconfigure the theater to stage shows from Cirque du Soleil. The arrangement was supposed to last a decade and generate hundreds of millions of dollars in new economic activity. Cirque’s show, however, fizzled after little more than a year.

CIM has plenty of friends in Los Angeles, but it also has plenty of critics. Dennis Zine, a retired police officer and former city councilman, helped the company win the right to develop the derelict Reseda Cinema, which appeared in the opening sequence of Boogie Nights. Zine said CIM promised big things, but then neglected the project, embarrassing him in the process.

“They burned their bridge with me,” Zine said.

CIM Moves into New York

Throughout the early 2000’s, CIM kept rolling up cash, in part by drawing investments from public pension funds like those in New YorkState  and California. In 2010, when CIM made its first foray into New York, the two states had more than a billion dollars with CIM. Neither pension fund would discuss the reasons for their investments.

It was a great time for investors with an appetite for risk and the potential big payouts. The financial crisis had wiped out big banks like Bear Stearns and Lehman Brothers. Those that were still around were barely lending, and many New York developers were struggling to pay their bills.

One of those was Harry Macklowe, who had acquired the site of the old Drake Hotel in Midtown Manhattan but lacked the money to build. Court records show Macklowe had tried to work out a deal to finance the project with Paul Manafort, who would later become Trump’s campaign manager, and a Ukrainian oligarch named Dmitry Firtash who had friendly relations with the Russian leader Vladimir Putin. But those negotiations went nowhere.

Then, in January 2010, CIM partnered with Macklowe to erect what is now known as 432 Park Avenue, the tallest residential tower in the Western Hemisphere.  One unit later sold for $95 million.

Later that year, CIM saw another opportunity: the Trump SoHo.

Though the condo-hotel project had been announced on “The Apprentice” finale in 2006, it was troubled from the start. Neighbors were immediately alarmed and upset with the idea of an outsized tower in the low-rise, chic district.

Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, recalled that the project was plagued with problems. He said there were “deadly construction accidents, bodies being exhumed on the site from a 19th century abolitionist church, falling objects from the building.”

Just after a gala ribbon-cutting for the Trump SoHo in the fall of 2007, the New York Times reported that one of principals in the building partnership, Felix Sater, had been convicted of assault for cutting a man with a broken margarita glass in a bar fight. He’d pled guilty to a stock fraud scheme. Another principal, Kazakh-born Tevfik Arif,was arrested on child-prostitution charges in Turkey. He was later acquitted.

It was, as Berman described it, “just an endless array of scandals and connections between the financiers and Russian andCentral Asian mobs.”

Condo buyers sued Donald Trump, Ivanka Trump, Eric Trump, and Donald Trump Jr., saying they lied about how many units had been sold. The Manhattan District Attorney began investigating whether there had been criminal fraud. The lawsuit was eventually settled, with the plaintiffs required to sign non-disclosure agreements. With few witnesses, the D.A. dropped its probe.

By 2010, the partners behind Trump SoHo, were falling behind on their construction loans, and the lenders were threatening foreclosure.

That’s when CIM stepped in with a reported$85 million lifeline.

Important Partners

The same month CIM saved Trump SoHo, December 2010, CIM bailed out the project’s  co-developer, Tamir Sapir, on two other properties he owned: 11 Madison Avenue and the William Beaver House in Lower Manhattan. In all, CIM spent more than a half-billion dollars and gained a stake in some prime New York City properties.

“There was a short window of opportunity that they just seized,” said the Real Deal’s Putzier.

CIM also soon embarked on its first venture with Kushner, an office building at 200 Lafayette Street. The New York Post reportedthat when they sold the building in 2013 — after $30 million in renovations — the new buyer paid three times as much as Kushner and CIM had initially invested. CIM and Kushner also appeared to turn a quick profit on another jointly-purchased office building, 2 Rector Street.

“The connection with Kushner, it’s very fitting,” Putzier said. He noted that the Kushner Companies own 20,000 apartments and 13 million square feet of office and industrial space, “but…they’re a family company, so when they do a lot of deals they usually need a partner with a lot of equity to help them, and that has often been CIM Group.”

Kushner Companies agrees. In a statement, President Laurent Morali — who replaced Jared Kushner as the firm’s top executive after Kushner went to work in the White House — said “CIM is a strong longstanding partner with a developer’s DNA. They can work through complicated situations, are thorough and strategic, yet also make quick decisions.”  The feeling is mutual: CIM said in a statement that it has “strong, collaborative relationship with the team at Kushner, which has proven to be a valuable local partner.”

CIM also said it “has only one business relationship with a Trump-related company” — the Trump SoHo. The Trump Organization declined to comment for this story; it manages the property under the terms of a licensing agreement.

“The headline attraction of being somehow even tacitly aligned with the President of the United States could provide an incredible fundraising opportunity if they play it right, if they spin it the right way,” said Serge Reda an adjunct professor at Fordham Business School. While the specifics of CIM’s pitch to investors are unknown, Reda said it would be expected that a private equity firm would discuss its record.

When CIM started making deals with the Trumps and the Kushners, its executives had no idea their business partners would one day occupy the Oval Office. But now they do, and ethics experts say that puts CIM’s connections to the First Family and its significant government business dealings in a new light.

The full extent of CIM’s government ties is not known; much of its business is private, though some investments are publicly traded. In public disclosures, CIM said it received annualized rent of $37.7 million from the General Services Administration and other federal agencies. The company said that losing business from a downsized government “could have a material adverse effect.”

CIM also depends on the EB-5 Immigrant Investor Program, which provides a path for foreign investors in American real estate to obtain U.S. green cards. According to the non-partisan research group Opensecrets.org, CIM spent $430,000 on federal lobbying in 2015, putting it among the top ten real estate firms lobbying on that issue. CIM listed preserving the EB-5 program as a major lobbying priority.

This is the same program that Jared Kushner’s sister Nicole Meyer, one of his siblings who now runs the family business, was recently promoting in China.

There’s one more program CIM might benefit from, which could dwarf its profits from EB-5, rents or pensions. According to SEC disclosures, CIM has an infrastructure investment fund which it acknowledges is sensitive to “regulation” and “political events.”  If Trump gets an infrastructure bill passed, funds like this could earn many millions from projects like roads and tunnels.

Kushner is at the center of the administration’s building plans. In March, the White House announced that he would head an “Office of American Innovation” whose mandates include “creating transformational infrastructure projects.”

“Whether the parties are doing something untoward or not, the situation creates doubt, and it will follow the President throughout his term as long as he owns his business,” said Jordan Libowitz, a spokesperson for Citizens for Responsibility and Ethics in Washington or CREW. “It’s a question we shouldn’t be having to ask.” His group is suing the president for violating the Emoluments Clause of the Constitution.

Last December, as the president-elect was preparing to move to the White House, the firm did one more deal with Trump-world: CIM helped Kushner Companies buy 85 Jay Street, a parking lot in Brooklyn, for an eye-popping $345 million.

Watch that space.

 

 

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