SoHo Real Estate

Patriotism is often an arbitrary veneration of real estate above principles.
-- George Jean Nathan (1882 - 1958)


The pace of construction has slowed Downtown. The new projects that are moving forward are primarily hotels. In part, this is due to the fact that little community review is needed when building as-of-right structures in a manufacturing zone. The Trump SoHo project is nearly completed and both the Tunnel Garage and Moondance Diner sites are in final stages of construction.
















Tunnel Garage Condo
























Moondance Hotel
























The condo project at 350 West Broadway is also nearly completed.

Rumors abound as to the success of any of these projects due to the dearth of financing for construction. In the case of Trump SoHo, 350 West Broadway and the Tunnel Garage condo development – the truth about sales is hard to come by. The fact that there is a vacant lot for rent at 100 Varick Street where an eight story rental building had been approved – followed by rumors of yet another hotel – tells the story of commercial real estate and development.

For tenants, the Stuyvesant Town decision at the Court of Appeals is the big story. Tishman-Speyer gambled and lost. Why any company would believe that thousands of rent-stabilized tenants could be forced out of their homes is a serious misunderstanding of a city that is built on landlord-tenant litigation.
Essentially, those landlords who benefitted from J-51 tax abatements are now precluded from using the luxury decontrol option to force stabilized tenants from their homes.
This was a ploy used by many aggressive operators to force tenants out of their homes.
In one case, two real estate newcomers who are also dentists at a Varick Street location in SoHo (actually Hudson Square) have been using this method for many years. Among the many other dubious methods to harass stabilized tenants out of their homes luxury decontrol has been the choice of these characters – with the willing cooperation afforded by DHCR and Department of Buildings. These denuded agencies allow illegally operated buildings to use the courts in furthering landlord plans. The Mayor has intentionally weakened both of these agencies in order to evict legal tenants and further development in Manhattan.
Recent laws regarding harassment and abuse are seldom enforced requiring huge legal fees to be paid by tenants. The $5,000 fines for such behavior enacted by the City Council is not only a joke, but is rarely imposed. In reality, tenant protection is a figment of the City Council’s imagination, in spite of the laudable efforts by Speaker Quinn. If you, as a tenant, pay legal fees and cannot pay rent at the same time – you lose one way or the other.

The Court of Appeals ruling, however, recently eliminated luxury decontrol in any building that was afforded J-51 tax relief for the landlord. Further, current market rate tenants who live in apartments, which formerly were stabilized – and were previously converted to market rate – may now be restored to stabilization. This is true regardless of whether the current market rate tenant occupied the apartment at the time it was converted from a stabilized status. In addition, any rent paid which was higher than what was once the registered stabilized rent – can be retrieved from the landlord (with treble damages) by the tenant.

Political Lessons

Times have changed. It's not like the Old Days, when we can do anything we want. A refusal is not the act of a friend. If Don Corleone had all the judges, and the politicians in New York, then he must share them, or let us others use them. He must let us draw the water from the well. Certainly he can present a bill for such services; after all... we are not Communists.
-- Don Barzini (The Godfather)


With Goldman Sachs bankers reportedly applying for gun permits to protect themselves from an enraged populace, its not surprising that there is some anger associated with playing the game of politics. As JFK once said, “Politics is the only game for adults.”
The game has evolved into a stage from which to pontificate upon “The Truth,” whatever that is. The trial of Joe Bruno, former leader of the State Senate, for example, shows us that retribution is usually is the order of the day – a tragic-comedy replete with rumors of rogue State Police units, political payoffs and favors.

But, what about the game within the game? What about the casino of supporting a politician in hopes of currying favor at some future time? And, what about the obverse of asking for support in order to get elected in the first place?
It’s like the Emperor’s New Clothes. Few will talk about it on record and those who do, give a stock answer that “You should support and vote for the best candidate, period. That is its own reward. Expect nothing in return. The best person winning, your candidate is the success you should want – and nothing more.”

Okay, that sounds good. It has a good ring to it.

And, in fact, sometimes the success of a particular candidate really is so important that it’s close to the truth.
Downtown, the success of Margaret Chin as City Council Member, and the unexpected victory by Cy Vance as D.A. were two notable examples of people who were critical to a progressive agenda for SoHo and sister communities – as well as Manhattan, in general.

Bloomberg is still a cipher to some – because his skills have been overshadowed by a seemingly dictatorial manner of governing that were only re-emphasized by the term-limits fiasco. However, he is an intelligent and able administrator, who seems more in tune with Aeschylus than Downtown residents. Trump SoHo, the DSNY garage on Spring Street, the overdevelopment, the neutering of the Department of Buildings (no landlord scrutiny and no tenant support), the dangerous and over-the-top bike lanes in SoHo and the failure to reign-in billboard proliferation – are just a few examples of resident dissatisfaction with his Imperial style.
There is no doubt that his friendship will further empower Frank McKay, noted political genius of the Hamptons who heads the Independence Party. That friendship will now be a lot closer – since Thompson clearly would have won the election without McKay’s support, in spite of the $120 million Bloomberg spent.

For others who ran, for those who did not pay enough attention to their base of support, it was a bleak lesson. Alan Gerson, thought of as a “nice guy” (he actually is) counted on Greenwich Village voters but burned his bridges with the Downtown Independent Democrats (SoHo’s powerful political club) -- and was turned out of office. Rumors have it that Gerson angered the President of D.I.D., Sean Sweeney and other important members, by claiming that he no longer needed the club’s support. He was warned by Sweeney that such a point of view would cost him the next election. Despite being an incumbent and having broad community support, as a result of his rejection of D.I.D., Gerson lost his bid for re-election. Activists were so antagonistic towards Gerson that they went so far as to create a website with the slogan ABG – anyone but Gerson. The lesson should not be lost on others.
But, as Monty Python’s famous line goes: 'No one ever expects the Spanish Inquisition.' Once elected, many politicians have brushed off their former supporters. It is a familiar gripe.

The recent defection by David Reck, Bill Love and Linda Belfer in a bid to form a new political club, followed on he heels of the Gerson loss.


Described by Sweeney as the Downtown United Democrats (DUDS), the success of this, as yet unnamed group, has completed the regeneration of D.I.D. After having foiled an attempted coup by Reck and Community Board #1 Chair Julie Menin to take over the club, the exit of members who opposed Sweeney will now be complete. He described it as excising a malignant tumor without having to operate.
With 200 members, D.I.D. is now poised to become THE downtown political club. The transitional period is underway and new leadership will be reinforcing its image. Jeanne Wilcke, Adam Sivera, Jim Stratton and Pete Gleason will be joining Sweeney.























Jeanne Wilcke









Adam Silvera























Pete Gleason























Sean Sweeney

In this game, politicians need to pay more attention to the desires of leaders who DO speak for the community. Those who work tirelessly for the benefit of others -- as well as themselves -- must now start making the needs of the community much clearer – and holding candidates accountable for their promises AFTER they are elected.

Thus far, that has been conveniently forgotten.

Rumors

In politics, an absurdity is not a handicap.
-- Napoleon Bonaparte (1769 - 1821)

Apparently, District Leader David Reck and Linda Belfer along with Bill Love have circulated a memo stating that they intend to form a new political club downtown. Politicians take note. The memo, written ostensibly by Bill Love, states:

“Our new club will have instant credibility with elected officials and other political leaders for several reasons, not the least of which will be the caliber of the people involved, such as you.”

The real reason for this foray is a certain degree of animosity between Reck and D.I.D. President Sean Sweeney, which has evolved over the last couple of years. Neither are low-key individuals and both have supporters as well as detractors among politicians and residents.
The boiling point seems to have been reached during an alleged attempt to pack the club by Reck associates last year – in order to remove Sweeney as President. It was believed that Julie Menin, Chair of Community Board 1, supported this move.

Starting a political club is not all that difficult. It just takes an enormous amount of time, energy and money. Unless, of course, the effort is being bankrolled by others. Maintaining a level of respect, developing a history and managing to be taken seriously by political candidates are the hard part. The notion of “instant credibility,” is a dubious one.
Of course, there is some question as to the validity of political clubs, in general. But, that’s another issue.
Reck is smart and works hard – especially, at petitioning.

Anger management is his Achilles Heel.




No doubt, this decision is due to frustration over Sweeney’s near-impenetrable Presidency at D.I.D. But, strong leaders manage political structures with sometimes-controversial personalities. That applies as much to Sweeney as it does to Reck.
This will play out in one of two ways, however:
D.I.D. might be weakened by a Reck and Belfer departure or, D.I.D. will become stronger as the people who are dissatisfied leave. Betting favors the latter.


It was today reported that Trump SoHo has entered foreclosure. This could not be confirmed but a Community Board member was reported to be the source of this rumor. SoHo Alliance Executive Director, Sean Sweeney who leads a group suing over the project was not aware of this rumor and could not confirm it. So, no dancing in the streets at this point, folks, since it is difficult to tell whether this is wishful thinking for residents of SoHo, or, is indeed a fact.

SoHo Election Views

Voter early and vote often.
-- Al Capone

In SoHo the general election boils down to only the race for Mayor. Chin (City Council 1st District) won the primary, as did Cy Vance (D.A.) and Quinn (City Council 3rd District). In Manhattan, a completely Democratic town, the Primary winner takes the brass ring. The only Republican, in form and function, was Leslie Crocker Snyder for D.A. She lost to Vance who won handily.

Yetta Kurland challenged Christine Quinn for her City Council seat and did surprisingly well since Quinn, the Speaker, came away with only 52% of the vote. Her political acumen may lead her to work more closely with the community but only time will tell. On the horizon for that slot is Kurland, if she runs again, Brad Hoylman (former Chair of Community Board 2) and Andrew Berman of the Greenwich Village Society for Historical Preservation. The latter has impeccable bona fides.

Margaret Chin will have a lot on her plate since, by all accounts, Alan Gerson was less than a tiger in his City Council position for eight years who, seen in the Village recently, was less than friendly. The tricky problems of vendors who line Canal Street with valises full of fake designer wares, ill-conceived bike lanes on Grand Street and other Village thoroughfares, the assault and harassment on tenants’ rights and trampling of communities by developers – will all be challenging issues facing the new City Council member.

Cy Vance, as the new Manhattan D.A. promises to be a breath of fresh air – taking over from the retiring District Attorney. He promises to build upon the long and successful reign, which was the innovative and progressive career of Bob Morgenthau. While he has the knowledge and compassion of a defense attorney, Vance also has the acumen of a prosecutor whose role it is to protect the citizenry from violent crime.

The Mayoral race between Mike Bloomberg and Bill Thompson is much simpler than it seems for most people. It boils down to the simple matter of whether voters want a benevolent or benign father figure telling them what to do and think – and can buy that role – or, whether voters, as adults are electing their political leaders. The term limits fiasco was foisted upon the public and Thompson has continuously pointed out that the Emperor has no clothes. There is no other issue.

Eye of the Storm

The surest sign that intelligent life exists elsewhere in the universe is that none of it has tried to contact us.
-- Bill Watterson (1958 - )


While the economy is improving according to our dear leaders, ominous signs have appeared to contradict the theory that the worst is over. The only indicators that support improvement are the stock market
and the broad effects of stimulus packages and propped-up consumer spending like the “cash for clunkers” program and tax credit for home buyers. Those programs and the real state of the economy are merely smoke and mirrors. It’s like taking money out of one pocket (taxpayers) and putting it in another (consumers) to show improved economic activity.
Who are we kidding?

As one person commented on a financial site:

When they talk about recovery, they do not mean you me or the average taxpayer. We are only required to pay taxes and suffer in silence.
Recovery is meant for Wall Street, the banksters and their bonuses.
That is what is meant by recovery.


There are a few major components that point to where we are and where we are going. Credit is contracting rapidly and banks lend to each other, or well-connected parties, after borrowing from the Fed. Wall Street has improved its balance sheets (on paper) and has survived with government money and the “carry trade.” Thus, with borrowed money to conduct business – $16 Billion is available at Goldman Sachs – for bonuses.
Banks and Wall Street have also survived the mortgage crisis by selling the toxic paper they needed to pump out for huge fees, to the government, and consequently applying for more Federal money when their balance sheet gets dicey.

One commenter writes about the situation like this:

“Bloomberg reporting that Crooked Timmie's shop, and Give-away Ben's shop, are populated by "advisors" that made millions and millions and millions of dollars from Goldman Sucks, Bank of Criminals, JP Morgan, etc. etc... Obama, just like Bush, and Crooked Timmie, just like Paulson, and Give-away Ben, are working as hard as they can to benefit their buddies on wall street... If they had taken those trillions and given it to main street, the recession would have been over long ago, along with the cancerous vipers on wall street... But the rich take care of the rich... the rest of us can ‘go pound sand’.”

Underlying all of this is massive unemployment. As credit evaporates, companies file for bankruptcy, commercial real estate collapses and people are fired, deflation sets in. Downsized companies need fewer supplies, fewer workers and smaller rental spaces. It is entropy in action.


All of this sets the stage for futile attempts to stop this process but only manages to put a finger in the dike. Even if there is a temporary halt to the process, hyperinflation will set in and create an even bigger bubble than the supposed subprime mortgage fiasco.

What we are facing now is the possibility of a double-dip recession
that might turn into a Depression starting in 2010. No one knows whether that will happen, but a 50% increase in the stock market within 6 months should clue everyone in to the erratic nature of our economic situation. Simultaneously, millions are unemployed (with more on the way), foreclosures are increasing (the so-called “prime” loans), home prices continue to drop, companies file for bankruptcy at an accelerated rate and credit evaporates precipitously.


When 20% of all homeowners who DO pay their mortgage and face possible job loss – and who currently owe more than they are worth (and values are still declining) – the prognosis for stabilization is 5 to 10 years away.
A lot can happen in a decade and much of it is pretty.

If the stock market has another major decline as many are predicting and housing continues to drop in value – coinciding with another modest increase in the price of oil to $100 or $125 per barrel – ALL bets are off.

The People have Spoken

When the eagles are silent, the parrots begin to jabber.
--Sir Winston Churchill

Last Tuesday’s Primary was an eye-opener for many of us Downtown.
The most watched contests were the CD1, CD3 City Council races and, more important the run for District Attorney.

Margaret Chin, an activist who has supported tenants in their confrontations with landlords and developers, won the CD1 seat handily.
She defeated incumbent Alan Gerson overwhelmingly. While she was not as involved in the heated controversies, as was candidate Pete Gleason, it’s clear that Gerson was damaged by the perception that his campaign had started to lose control. The loss of matching funds, the delays in being listed on the ballot and the overhang from his unpopular support of term-limit extension, were fatal to Gerson’s re-election.
While there was increasing rancor over the perception by many activists that Alan had ignored their community needs, the handling of his campaign was really the nail in his political coffin.
As always, Alan is a “nice guy.” We wish him well.
Pete Gleason always was a stand-up guy in the community. He fought hard and has supported the community as a fireman, police officer and attorney.
We look forward to his next move. For the moment his plans involve a return to his legal practice.

The CD3 race was a tough one for many. Quinn has baggage but is seen as a strong citywide City Council Speaker. Her mistakes lie with how her Downtown district constituents view her efforts for them. There are political moves afoot, however, to remove her Speakership.

Kurland fought a good fight and her challenge to Quinn was a closer call than one would have been expected. The message here is that even a strong Speaker may want to consider community outreach that is perceived as a genuine attempt to mend fences.
Especially, if Quinn plans to run for Mayor. The support of Bloomberg over Thompson (which she has alluded to by her refusal to commit), in light of the negative view of the term-limits fiasco that caused many Council members their seats, is clearly a mistake. Gerson can vouch for that.

Many clubs and Downtown activists supported Richard Aborn for D.A. He is seen as a progressive who wanted to make real changes in the criminal justice system.
Leslie Crocker-Snyder was perceived as a conservative, and despite the fact that she reached out to women (calling on her ostensible strong support) and heavily criticized Vance; it was not good enough to seal the deal. She clearly had the advantage going into the race – especially, on the heels of a better than 40% share of the vote against Morgenthau from 4 years ago.
As Vance pulled up in the polls, the strident content of her message started to scare a few people. Not just the criminals.
Vance will be a breath of fresh air, especially in his desire to build on Morgenthau’s successes and focus on the major problem of recidivism.

Cy Vance’s campaign was handled very well. His momentum grew slowly and his message of change did not criticize Morgenthau but alluded to the fact that he wanted to further expand certain efforts. Of course, it did not hurt that “Morgy” heavily supported him. Or, that the Kennedys endorsed him. Even Gloria Steinem helped get out the vote.

Gradually, the well-placed media blitz garnered endorsements from the NY Times, Daily News and NY Post. Even downtown’s prescient niche publication, The SoHo Journal, featured his images and interview with a Warhol-styled cover reproduction – the magazine’s first cover featuring a politician.

Ultimately, Vance’s easy manner, firm stance on crime and innovative ideas, seeped into the voter’s consciousness and took hold. He was elected in a landslide.

Where the Buck Stops

When you come to a fork in the road, take it.
-- Yogi Berra (1925 - )


We have reached the point of no return on the final round of Downtown politics. For a Democratic town, the Primary is THE election. The most relevant for us are the District 1 and District 3 City Council (the two affecting SoHo) and Manhattan District Attorney races.

Essentially, the City Council races are the Gerson/Gleason/Chin contest (CD1), the Quinn/Kurland face-off (CD3) and the Manhattan District Attorney Vance, Aborn, Snyder contest.

Calling any of these races is next to impossible.

Quinn has suffered from some serious mudslinging and rancor from community activists over the DSNY garage, the Trump SoHo behemoth and disaffection from her support of the term-limits rollback. Support of tenants, as a bedrock of her community support has been tepid since she is perceived as someone who has failed to really target the landlord games that still permit stabilized tenants to be evicted using the “lawsuit ploy” and does not at all protect market rate tenants from gouging once their one or two year lease expires. Tenants who complain do not get a lease renewal.
However, Quinn is an able politician who knows how to navigate in a dangerous environment. Despite the accusations regarding “Slushgate” it is a fantasy to suppose that Council funds (or those in any other elected office) are not part of the risk-reward system that politics is about. Running a campaign, not to mention living your life, under possible indictment takes a strong, dedicated person. Toughness counts for something, even if you don’t agree with the person who is running.
Kurland, on the other hand, is untested but has gained substantial support from community activists who want a clean sweep. Her bona fides seem to stem from gay rights and a willingness to confront issues important to the community. Her support has substantially grown in recent weeks and those who have written her off initially are now thinking twice.

The Gerson, Gleason, Chin contest is another race that is impossible to call.
While Gerson is the incumbent, his growing unpopularity has only been upstaged by a badly managed campaign. To have lost matching funds and a place on the ballot for a time shows a massive lack of competence – at least about running a contested election. Gerson, by his decisions, seems to have been massively unprepared for a challenge. Not without basis contenders, such as Pete Gleason, have pointed out that this alone shows that Gerson is not qualified to run again. Most of the verbal fisticuffs have occurred between Gerson and Gleason (who backed away from challenging Alan in the last election) and that has not been lost on the minds of voters in the Village, SoHo and Tribeca. Gleason has confronted the incumbent and there is no question that he has damaged Gerson, whose prior popularity has been based up being known as “a nice guy.”

Margaret Chin really is a “wild” card. While having been criticized as somewhat provincial due to her base in Chinatown, her housing activist background is clearly her community-based “ticket-to-ride.” Chin’s often touted 6000 vote base may, in fact, carry her over the top.
But, this race could go in any direction.


The Power race, of course, is the District Attorney race.
Aborn has been the early favorite Downtown. He is seen as a strong, progressive politician who is attractive and falls on the right side of liberal ideals for what we want in Justice.
Snyder is seen by many who support the “woman” card as a guaranteed winner. She has backed off from her previous position, which seemed to support the death penalty and according to her campaign mentor, Jim McManus, is a tough judge who will win the election. According to him, she got the hard cases from Morgenthau and will be a tough, but fair, D.A.
Cy Vance has been the object of a few jabs by Snyder and his campaign surged within the last several months. His progressive agenda is similar to Aborn’s and is popular Downtown.
The fact that the New York Times, New York Post and Daily News have endorsed him has been something of a surprise.

This race cannot be called, either.

Vote in the Primary on September 15th!

Election Logic

Politics is applesauce.
Will Rogers

You almost need to be a lawyer to figure out what’s going on with the District 1 City Council race. As near as we can figure out the major issue regarding Alan Gerson’s spot on the ballot is that Board of Elections submissions -- which involve the lists of signatures needed in order to be placed on the ballot – are a big deal. There really can’t be any wiggle room. All of the information has to be in a specific form, the “cover sheet” has to be correct, and the verifications, which attest to the correctness of the signature submissions, must conform and be signed off by one person. When details go astray, so goes the logic, many more sub Rosa problems may lie beneath. Almost no one thinks that Alan Gerson has supplied false documents.

The dilemma, which the Gerson campaign currently is dealing with, is the fact that a series of errors – not seemingly egregious to the layman – has placed his submission of signatures in jeopardy. The courts are likely to rule in Gerson’s favor due to the fact that he is an incumbent and, popular or not, the mistakes do not appear to be critical. The whole process was sloppy and it was compounded by mistake after mistake.

Both Margaret Chin and Pete Gleason have understandably made an issue of the sloppiness – which, if you are trying to make a political point – underscores a certain inattention to detail at the very least.
Pete Gleason has come out swinging on this issue because he himself has been held up to a high standard of professionalism and this issue has proven his issue with Gerson’s candidacy. His criticism of Gerson has, among other things, pointed to a lack of detail, clarity, interest consistency and follow through – in representing District 1.

That’s political speak for Gerson having let down SoHo.

City Council Heat

In politics, absurdity is not a handicap.
-- Napoleon Bonaparte (1769 - 1821)


The City Council races for Downtown continue to heat up. Christine Quinn appears to be on track to be re-elected in her district while Alan Gerson is having his problems. Among the contestants in District 1 are incumbent Alan Gerson, Pete Gleason and Margaret Chin. While speculation has the contest in a three-way tie, Gerson is losing ground in the Village, SoHo and Tribeca to Gleason and in Chinatown to Chin.
It’s difficult to make a prediction but the latest technical difficulty on Gerson’s part is the fact that the Board of Election has removed him from the ballot for the upcoming Primary due to questionable signatures. It is likely that these are just technical problems that will be overcome but it indicates, if nothing else, a certain lack of attention to details.

Gleason lost no time in making comments on the situation.

Political Reflections

Don't ask me nothin' about nothin', I just might tell you the truth.
-- Bob Dylan, "Outlaw Blues," 1965

The races which are generating the most heat are City Council districts one and three, District Attorney, and Mayor.
Tony Avella and Bill Thompson are both running against the proverbial 1000 lb. gorilla – Michael ($20 Billion) Bloomberg.




While there is a lot to say, term-limits and cash, carry most of the weight in terms of who wins. Avella has come out on the right side of many community issues and has manned the barricades with activists. Thompson has waged a tireless and consistent campaign to make a difference between a city government that takes residents for granted and a populist style of governing. An upset victory is NOT impossible.

The District Attorney race has Leslie Crocker Snyder on one side of the fence – a conservative who previously supported the death sentence but who now rejects it. She is running based upon her experience as a judge. Running against her is Cyrus Vance, Jr. and Richard Aborn, a liberal and a progressive candidate.

While this race is over a very powerful position, thus far it has not generated the kind of enthusiasm one would have expected. They may soon change, however.


Jim McManus, recently split with Carlos Manzano on ideological grounds, heavily supports Snyder – to the chagrin of Bob Morgenthau, the current D.A. Morgenthau is believed to support Vance and is miffed about McManus’s endorsement. But, politics is both practical and ideological. Remember, McManus supported Suozzi over Spitzer and enjoyed the last laugh when he abdicated.
Aborn has gotten the support of downtown’s D.I.D., which came out strongly in favor of his candidacy – twice the vote earned by either Snyder or Vance. Yet, Vance has recently begun to make his voice heard in a barrage of press releases.

The City Council races are a study in pure political gamesmanship. A great deal of animosity still follows Chris Quinn around over what is perceived as her rejection of the community – over such issues as the term-limits debacle, Trump SoHo and the Sanitation Garage. While she is a superb politician, the danger is that she may be viewed as narcissistically self-involved rather than the shrewd operative whose expertise inures to the interests of the community. A little better PR and a few overtures in a less defensive way would, without doubt, give her the race. Right now, Yetta Kurland is pulling up strongly behind her and has a vociferous following.

McManus supports Quinn partly because he handed her the Speakership, and partly because he thinks she will be the winner. D.I.D. chose Kurland – but originally chose Quinn, only to lose to Kurland in a second vote. Kurland’s second vote support came from cross endorsements from other candidates (notably Derr) who could not win and threw their support to her.


The real danger here, for Quinn, is that losing popular support while winning most of the clubs is a tricky road to success. Kurland is seen as inexperienced while Quinn is seen as aloof within her own district.

The Gerson, Gleason, Chin race is another kind of race entirely.






The incumbent, Alan Gerson, has been seen as coasting for the last 8 years, having frittered away the opportunity to benefit from the 9-11 momentum for downtown, and having learned to rally forces only when faced with the prospect of being out of a job. Even his support of term-limits has not earned him the benefit of a Bloomberg windfall. After nearly losing his own club’s endorsement, he managed to lose the D.I.D. endorsement to Pete Gleason, a former firefighter, police officer and attorney.
Between pushing and shoving, charges of an absentee performance, numerous ploys that allegedly involved stacking D.I.D. and rumors of helping to arrange shills to split the primary vote – Gerson’s re-election attempt is generating more heat than anyone expected.
As of this point, Margaret Chin (who has been suspiciously thwarted in getting media coverage in lower Manhattan weeklies) claims to already have several thousand votes and is already over the top with regard to qualifying for matching funds. With an expected turnout of less than 15,000 voters, a woman with strong community support and growing non-Asian interest is potentially formidable.
Pete Gleason has pulled up strongly and generated new support in the Village, SoHo and Tribeca, which formerly went to Gerson. Interesting letters have been popping up like crossed swords in the campaign controversy over qualifications and background – ergo suitability for this job. The Downtown Express published a missive from Mr. Love (scroll to bottom of link page), a Gerson supporter and Jeanne Wilcke as well as others, have answered it.

We’re in for a hot summer!

The Changing of the Guard

If we don't change direction soon, we'll end up where we're going.
-- Professor Irwin Corey (1914 - )

Last month Community Board #2 held an election for its new leadership. Brad Hoylman relinquished his post as Chair of the Board and mostly new leadership has taken over. Actually, a few existing members of the Board simply move over a seat and increase their visibility as well as their stature. There were no floor fights and the slate was elected without a negative murmur. It’s a far cry from some of the contentious, dirty tricks, anonymous-letter, days of the past at CB2. While it’s probably a good thing, it does take just a little of the excitement out of community politics. But, so be it.
The slate is as follows:

Jo Hamilton - Chair

Bo Riccobono - First Vice-chair

Sheelah Feinberg - Second Vice-chair

Susan Kent - Secretary

Elaine Young - Assistant Secretary

Amanda Kahn Fried – Treasurer

All are qualified and well-intentioned members of the community and will no doubt do an excellent job. At one point, Jo Hamilton had stated that she was committed to carrying on the work that Hoylman had been doing. Nothing she has said recently has indicated anything different in her attitude.
To the extent that Community Boards are relevant to the wishes and needs of the community’s residents – and, not simply a political reward for knowing the right people – we can hope that CB2 moves in the direction of greater cooperation with Boards #1, #3 and #4 on a number of issues – not the least of which is greater protection from pollution, removal of unwanted billboards, protection from traffic in our crosswalks, better control over Con Ed and maintenance repairs during evening hours, and a more assertive stance to protect tenants from landlord harassment. Not only do rent controlled and stabilized tenants suffer – but, market-rate tenants suffer a great deal as well. When you have a two-year lease and pay high rent and yet you cannot complain about such things as lack of heat or mold growing in your bedroom, the fear of not having your lease renewed is a serious problem. The silent tenant is often an abused tenant. And, abuse of tenants is a growing problem in New York City.

The Community Boards need to recognize that there are problems that they need to solve by working together.

The Upset

If you’re going through Hell, keep going.
--Winston Churchill


In a stunning upset endorsement vote, D.I.D. chose Pete Gleason for the 1st Council District candidate Tuesday night.
In a vote that initially gave Gleason the endorsement by only 2 votes, after a recount he clearly won by 64-52. This places him in a position to seriously challenge Alan Gerson’s bid for a third City Council term despite numerous speakers touting his record. Apparently, that support for Gerson fell on deaf ears.

And, there was a subtext to two other races which were initiated against two of D.I.D.’s popular District Leaders, Adam Silvera and Jean Grillo. Both were easily re-elected despite attempts at club stacking and political threats. While David Reck was also re-elected, he received a very high number of "No-endorsement" votes, despite the fact that he had no opponent.

The other contentious races had Yetta Kurland seriously challenging Speaker Chris Quinn. Quinn lost in a second vote for the City Council seat, bolstered by 11th hour maneuvers by Derr and Fouratt who spoke during the re-vote from the floor. Since Quinn actually won the vote but wanted a greater clarification of support, the real question is why Fouratt (who essentially did no campaigning according to Sweeney) received 10 votes -- and why both he and Derr threw their votes to Kurland in tendem so expeditiously. So, while Quinn actually won the endorsement vote, the re-vote (which Quinn pressed for) was changed by multiple last minute endorsements for Kurland. There have been rumors that this was engineered and augmented through the use of palm cards and a previous strategy by anti-Quinn forces. Hey, that's politics! Kurland is now the D.I.D. candidate. However, Quinn did garner the outright endorsement of the Stonewall Democratic Club.

Cy Vance with 17 votes and Leslie Crocker Snyder with 18 votes were both heavily outvoted by Richard Aborn for District Attorney. While Vance has had some campaign mis-steps, the Snyder results were surprising to some in view of her strong showing in the last general election when she ran against Morgenthau. While Vance consented to be interviewed in the SoHo Journal, Snyder declined the invitation citing legal complications. Aborn has not yet responded to a request.

The Hot Seat

I do not care to belong to a club that accepts people like me as members.
-- Groucho Marx (1890 - 1977)


The major candidates have been making the rounds downtown and of the offices that are up for grabs, only the District one City Council seat is hot and about to get much hotter.
Alan Gerson is running again since term-limits were extended, allowing Bloomberg to again run for Mayor. More than a few people had difficulty trying to figure out why Mike did not simply hold another referendum considering the fact that he really had the support of many New Yorkers.

The politics of the decision to take the City Council route to approve his third term run may never be fully understood – given the fact that his very well paid campaign staff had to have known that this method of succeeding opened a chasm between the Mayor and the people, perhaps unnecessarily.
The real damage, however, was done to politicians who were supporters of the Bloomberg plan and which also benefited themselves. The Mayor will survive very well, thank you. That’s not necessarily true for those who supported the plan in the City Council against the wishes of many in the community.

This brings us to the City Council seat race, which Gerson currently holds. The main challengers to Gerson are Pete Gleason and Margaret Chin. Chin is an activist whose greatest support comes from the Chinatown community and Gleason’s strength is stronger with unions, firefighters, police as well as growing sections of Greenwich Village and SoHo.
What is significant is that Gerson only narrowly won the support of VRDC, his own Democratic Club on a second ballot. For a challenger, Gleason clearly has turned the tables on Gerson and the upcoming D.I.D. vote may be a significant indicator of which direction this race may go.
Chin needs to break out of the perception of provincialism and Gleason needs to raise a lot more cash. If these things occur, it may become a wide-open 3-way Council race.

Imagine

If I'd written all the truth I knew for the past ten years, about 600 people - including me - would be rotting in prison cells from Rio to Seattle today. Absolute truth is a very rare and dangerous commodity in the context of professional journalism.
-- Hunter S. Thompson


The people shall not be deprived or abridged of their right to speak, to write, or to publish their sentiments; and the freedom of the press, as one of the great bulwarks of liberty, shall be inviolable.
-- James Madison




Imagine that you are a journalist in a country where the ruling party and its government does not tolerate criticism or a difference of opinion. Or, were you to voice opposition to the government, you would be killed or destroyed – using any means possible. That the focus of the government attacks may be couched in some other mainstream, popular vehicle, permitting vast media resources (including PR and phony leaks) to create an adverse frenzy is merely part of a strategy. Think about reporters waiting for you at every turn, walking around your apartment and offices, asking accusatory questions based upon innuendos and lies to sell tabloids and gain viewers. Almost any excuse can be used by a government to make you, yes you, a criminal to be pursued.
What is widely viewed as legitimate business practices, can, with a twist of focus by a government official, become an illegality.

In Russia, several journalists and human rights advocates have been the focus of convenient, high profile murders that were never solved. Court cases pointed accusatory fingers but juries have acquitted them – as arranged. In Iran, North Korea and other countries, similar actions have caused journalists following important issues to be tried and imprisoned simply for investigating and writing.

For a journalist in America, with financial devastation facing many publications, prospects for the continuation of Free Speech and Freedom of the Press is in severe jeopardy. Even the New York Times is in serious trouble and may be sold within a year. Only bloggers, themselves journalists, have a real handle on many issues and continue to carry the torch for truth, even if biased at times.
A journalist or blogger now must often choose between writing the truth, conveying a sense of the real subtext in his or her political environment or community, and being able to live one’s life unmolested. There is a heavy price to pay for speaking out.

Who will uncover truth in our society if these trends continue and more and more media slip into the mist of history? How will we continue as a Democracy if the forces of the State are allowed to destroy people using whatever means at their disposal?

Imagine that you had a point of view that you were afraid to voice in America. Will we now crucify and destroy those who disagree with us? Is this the new journalistic reality? Is this our future?

If we lose our liberties, there is no end to the slide into totalitarianism and terror.

The Flap

Politics is applesauce.
-- Will Rogers (1879 - 1935)

With the contentious races for several political offices, it’s no surprise that even the clubs are giving off some heat.

We are a long way from decisions on who D.I.D. is supporting but the McManus Westside Democratic Club is already out there. The problem is, there’s a little controversy over the press release sent out by Bernie Cohen, Jim McManus’s longtime friend.

The press release supports Leslie Crocker Snyder, John Liu and Eric Gioia. According to Cohen, Jim McManus knew about the press release – according to McManus, he didn’t.

When he was reached by phone, Jim stated that he is supporting Snyder but has not made a decision on either Liu or Gioia. “Bernie says I authorized the press release and I say I didn’t” was his response.

With every move that the political people make and then figuring out the percentages gained or lost with each chess piece moving about the board, these little tidbits matter.

Packing the Club

Injustice anywhere is a threat to justice everywhere.

-- Martin Luther King Jr. (1929 - 1968), Letter from Birmingham Jail, April 16, 1963

A time-honored method of controlling a political club is known as “packing” or “stacking” the club. Simply described, either a candidate or nominee operating for a vested interest brings new members into the fold at a moment in time so that at the next vote they will be qualified to make the right choice.

While political clubs have lost their luster, there are still arguments in favor of an organization that expresses the wishes of a community or territory – sometimes pulling broader influence with it.

Downtown Independent Democrats" has developed out of SoHo and has carried the reputation of being truly independent along with it. SoHo itself has evolved from artists who ventured into a gothic jungle of warehouses and printing factories from places like Greenwich Village to escape the status quo. Leaders like Kathryn Freed, Jim Stratton and Sean Sweeney gave D.I.D. a special flavor.
As a result of D.I.D. successes, it is one of the few political clubs that aspirants really care about for endorsements. Scott Stringer, for example, managed to win his race for Borough President of Manhattan due, in part, to the vote in SoHo – and the support of D.I.D. The support of a truly independent club actually does still garner votes.

So, at various times, several political candidates have attempted to pack the club with their supporters in order to control the vote for officers. This past Fall, Julie Menin reportedly attempted a coup (which she denies) – followed most recently by Alan Gerson’s efforts. Gerson was actually supported by D.I.D. in the past but has fallen into disfavor with many rank and file club members. He is rumored to be packing the club so that his upcoming race will gain the support of the club once again. A number of current D.I.D. members who, due to Gerson’s fealty to Bloomberg on term-limits (he supported them) and his dubious record in SoHo, belong to the ABG club – “Anyone But Gerson.” While Menin is no longer believed to be trying to pack D.I.D., as Gerson has continued, Gleason is also reportedly trying to even the score by placing some of his people on the roster.


Gleason has suddenly started to get a serious second look as someone who will respond to the needs of SoHo residents.

There is nothing immoral or illegal about trying to take over a political club but there are certain rules of conduct that have always been followed NOT in the tradition of Tammany Hall. With quality performance in office, a club normally welcomes the enlargement of its membership base from an elected official. Not so, in this case.

The Prosecution Rests

In a recent interview we spoke with Cy Vance, Jr., the frontrunner in the race for Manhattan District Attorney.


It was like a blast of fresh air in a discussion that touched upon his plans for improvements in our criminal justice system. Bob Morgenthau, who is retiring this year, has provided us with a sense of fairness in Manhattan and clearly Vance seeks to improve upon that legacy. The full interview will be published in the April SoHo Journal in addition to next week’s blog. Stay tuned Rangers.

The Elephant in the Room

The truth is rarely pure and never simple.
-- Oscar Wilde (1854 - 1900)

While everyone is busy trying to point the finger at what happened to cause not only our economy, but also the world’s economy, to implode – consider this?
The total value of the U.S. stock market is under $15 Trillion, the total value of all real estate in this country is under $25 Trillion, and our total GDP stands at about $14 Trillion. The value of the entire world’s stock markets currently stands at under $50 Trillion.

But, what most people do not know is that it is nearly impossible to correctly value the number of derivatives , which are outstanding. These “bets” or contracts that hedge credit obligations – which include bonds, mortgage securities and corporate debts, including credit default swaps – amount to about $700 Trillion. Or, nearly three quarters of a quadrillion dollars. Others believe the amount is larger.

This Wall Street phenomenon is the real story in our economy. It is one problem that years ago Warren Buffet warned us all about and it is one which he recently mentioned when he said he hoped to be out of any derivative positions in “a few years.” Good luck.
So, as most consumers and many banks look askance at the muddled real estate market as well as the non-existent credit markets (insofar as ability to borrow), all are missing the boat as to the source and degree of the problem. We have an inconceivable amount of money (or, rather, the fantasy of such an amount of money actually existing) floating about in the Ether as mutually balanced obligations -- that will never be able to be paid in the event of default. Those defaults are now happening. And, as the defaults wind down deflation (reduction in value) accompanies the entropy.

This, in fact, is what we are grappling with in this economic disaster: The prospect of economic Armageddon. The world does not contain the amount of money or physical assets to balance out both ends of these bets in the event of default. If the buyer of a derivative defaults, having purchased the insurance to cover that “bet” -- and the guarantor (counterparty) of that insurance does not have the resources to cover that defaulted debt – what is there to be done?
Those are the questions being asked about AIG, Citigroup, Bank of America, Lehman Brothers, Bear Sterns, Merrill Lynch and thousands of companies that are defaulting on debts covered by derivative contracts. All $700 Trillion of them.

The Elephant in the room is restless and wants to eat.
And, until he does, there will be no new loans, no expansion of credit for the economy, no new jobs, no food, and certainly no housing. That means the end of the Hamptons economy and a severely diminished Manhattan economy. Expansion and building as we know it is done. A sign of these times is one new phenomenon: vacant lots in Manhattan with "For Rent" signs on them. There is no money to build.

Mortgages imploded due to the phony securities that Wall Street created in order to collect fees and create securities that NEVER had the value ascribed to them. In fact, the subprime situation was only a pimple on the elephant's tail. And, now all of us are paying that price.
It was the derivatives market that spawned the disaster we are now entering. As Thomas Kostigan of Marketwatch reports,

“It isn't the housing market devaluation, or the sub-prime mortgage market defaults that have us in real trouble. Those are nice fakes to sway attention away from the place where greed truly flourished -- trading phony instruments to the tune of $700 trillion.”


Interesting notes: Poland’s mortgage market was mostly written in Swiss francs. Nearly 60% of all mortgages are pegged to the value of the polish currency to the Swiss franc.
The polish currency, the zloty, has dropped nearly 50% in relation to the franc. One can only imagine what lies ahead in that situation.

UBS is just the tip of the iceberg with regard to the Swiss banking crisis – spawned by the IRS insistence that all 52,000 foreign (mostly American) accounts be divulged so that taxes and, no doubt, prosecutions, can begin for not paying taxes on these numbered accounts.
It is likely that Swiss banking, the country’s main industry, could be destroyed by this American move. No account secrecy, no deposits.

Downtown Currents

One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.
-- Plato (427 BC - 347 BC)

Bob Morgenthau finally withdrew from the election process this week after decades of public service as Manhattan’s District Attorney. For years there had been speculation that Catherine Abate was the heir apparent and was waiting in the wings until “The Boss,” as his staff knows him, stepped aside.
Instead, as the rumors swirled, Abate was sidelined as the likely candidate to oppose Leslie Crocker Snyder in the upcoming Democratic Primary election.
While Downtown, in many cases, is considered a lock for the Jewish female vote, one of the reasons why Alan Gerson, again running for District 1 City Council seat, may still have an edge. Sophie can be heard in the background whenever Alan is on the phone.
Snyder was previously a law and order candidate who supported the death penalty but she took that off the table. Her 40% of the vote showing in the last election gives her substantial credibility.
But, countering Snyder’s move is a possible run by Dan Castleman, Morgenthau’s right hand man in the prosecutor’s office – as well as a serious challenge by Cyrus Vance, Jr.
Vance not only has name recognition but also presents a serious challenge to divvying up the Jewish vote. His father and his family stood out in fighting for the rights of Israel at a crucial point in history.


Little has been heard from Maria Derr lately, former Board #2 Chair, who is running against Chris Quinn in her bid to retain her seat in the City Council race. But, Yetta Kurland, a proponent of gay rights is another contestant in this race and may do relatively well and has some buzz.
However, it is unlikely that Quinn faces a serious challenge. Those who have criticized her (including this writer), recognize her immense political skills. A powerful Speaker who seeks to improve her ties with the community is more to be desired than a novice with a wish list. And, Quinn and her staff have been moving in the direction of building new bridges.


Little has changed in the Gerson/Menin/Gleason/Chin saga for City Council. We should expect sparks sometime this summer as the jockeying heats up.
A few rumors and tidbits have flown about.
Menin’s new blog apparently publishes on Huffington Post and the site apparently has rejected negative comments.

Gleason appeared on network television to dispel the belief that his 9-11 board game is a flight to insanity – rather that the point was to create publicity for the tragedy. Of course, those of us downtown well know that while the disaster may not have been avoidable -- many firefighters and police were unnecessarily exposed to danger and untimely death due to inadequate communications.
Anecdotal reports of dysfunctional transmitters and garbled transmissions are well documented and the anger harbored by those who know the truth about the treatment during and after the disaster are legend.


In Memoriam: Albert Edward Neale 1917-2009. Andy Neale’s 92 year
old father passed this week after a short but severe illness. As Andy describes him, he was “ a reserved man of fierce intellect, a wonderful husband, a decorated war veteran, a compassionate human being and a liberal to the end who thought Obama was the greatest thing to have happened to the USA.”

Notes from Downtown

In politics, absurdity is not a handicap.
-- Napoleon Bonaparte (1769 - 1821)

The District 3 City Council seat has been a source of intense scrutiny. From the pre-Term Limits speculation about candidates, which had Brad Hoylman running against Andrew Berman and Maria Derr tagging along, we now have Christine Quinn back in the mix with Derr still tagging along. Various stragglers are in tow but its mainly Quinn.

Quinn brings the Speakership, tough attitudes and experience – as well as animosity from voters over issues like Trump SoHo, the DSNY garage in Hudson Square and the Term-Limits deal.

What strikes many as difficult to understand, is why Bloomberg thought it necessary to push another term on us at all costs when he was riding a wave of popularity that seemed to make it unnecessary. The operative word, here, of course, is “seemed.” Maybe Staten Island is wavering.

Quinn supported Bloomberg and, of course, was backed up by enough Council members with their hands out to make term-limits work.

It STILL does not mean that we are not better off with Bloomberg. It only means that it was done in a “Big Brother” fashion. There’s never a good taste in your mouth after having a rusty pipe rammed down your throat. But, despite all of the Harvard boys around, it’s possible that he did not think that holding another referendum was a chance he wanted to take. But, why doesn’t he now just hold the referendum since he’s holding all of the cards? We all know how to drink the Kool-aide with grace.

But, the damage to Quinn was temporary, just as the damage over the Slushgate imbroglio seems to have passed. Or, not.

Even an indictment doesn’t make you a bad person. It only means that you matter and that you have political enemies. Welcome to the real world.

The difference between having a controversial Speaker/Council Member as opposed to one who is incompetent, of course, matters greatly.

Quinn’s main opponent is Maria Derr, former Board #2 Chair and heir-apparent to the Passannate name (Bill Passanante of Greenwich Village), who preceded Deborah Glick in the Assembly.

Derr, a candidate who has bounced from club to club in search of a political position to run for, settled upon Quinn’s seat after the idea of running against Deborah Glick seemed like folly. Glick is well-respected and, while sometimes paranoid about being challenged, has little to worry about. Few candidates can hold a candle to Deborah’s genuine community bona fides.
Derr has traded on the Passanante name, close related to Carmine DeSapio, only recently. Prior to that, her uncle was rarely mentioned.

But, Derr’s affiliations were what has always been suspect – in a low-level sort of way. Her connections with a group of minor power brokers on Board #2 kept her in questionable company with people whose dirty tricks were not particularly elegant. The level of mean-spirited games played by such luminaries as Alan Roskoff and Bob Rinaolo, or dearly departed Arty Strickler – while she was Board #2 Chair – were mildly shocking at the time but were, in reality, simply comical in import. Her level of sophistication apart from a heavy commitment to retaliation leaves something to be desired, even in a politician.

In fact, after insinuating herself on the McManus Midtown Democratic Club (after pulling the same stunt at VRDC), she sent out a press release with photos of herself and Jim McManus, seemingly portraying support for her candidacy for Quinn’s seat.

According to Jim McManus, who was reached for this piece, he did not even know about the flyer until after it had been mailed out.

He stated flatly that he supports Christine Quinn for City Council. He helped Quinn garner her Speakership and he firmly supports her for re-election. This City Council seat is in McManus territory and he knows politics. Period. End of story.
As a side note, for those of you who are wondering, Bob Morgenthau IS running for another term. Yes, -- and Leslie Crocker Snyder is also running. Rumors have abounded for years about Catherine Abate and more currently about Cyrus Vance, Jr. – should Bob decide not to run. Well, he’s running.

If it is worth anything, the mistake is making his age THE issue. In a personal interview, this writer found him to be completely and fully engaged, in charge of the issues, and in charge of the situation – as well as a tough politician. His prosecutors, like right-hand man, Dan Castleman, are also the kind of 1000-pound gorillas you don’t want to screw around with. Snyder has dropped her death penalty requirement as a gesture to liberals but Morgenthau is still running the show.

Frontrunners and Dark Horses

The word 'politics' is derived from the word 'poly', meaning 'many', and the word 'ticks', meaning 'blood sucking parasites'.
-- Larry Hardiman


As the race for District 1 City Council seat starts to warm up there are numerous scenarios being played out in the minds of political junkies Downtown.



The big question is, besides the new lease on life for Alan Gerson, who will be running for that seat. While unopposed in the past, Gerson has a few contenders who would like to replace him. The are a lot of voters who apparently feel the same way. In addition to the race itself, there are rumors that a deal is in the works which would have Alan going out the back door before the Primary to take a position promised him by Mike for supporting the term limits win.






Julie Menin, a recent Republican, is currently a Democrat who is Chair of Board #1 and widely known as desirous of the Council seat. The ill-fated takeover of D.I.D. has abated somewhat and it reportedly earned a bit of ire from Borough President Scott Stringer, who benefited from that club’s support.
Both Menin and Gerson are friends of Bloomberg and were supportive of his term-limits putsch. She has publicly stated that she is not running against Alan and is busy developing a new life as Democratic consultant and blogger (now railing against Republicans). Since there are no term limits on Board #1, we will continue to hear about her views on lots of issues. A large cache of cash and a PR firm will ensure that.

However, some doubt the finality of her public decision and we may yet see some curious twists and Machiavellian turns. As the song says, “See you – in September.”


Pete Gleason has vowed to run against Gerson, regardless of what happens. He is considered an underdog, if not a dark horse. While he has a lot of ground to cover, he is gaining support. He is wrapping up his legal practice and will be campaigning full time starting in February.
He may also garner some unexpected main line political support because of Gerson’s position on term-limits, which was very unpopular among voters. Gleason’s strong points are a following among police, firefighters and civil service as well as disenchanted residents in SoHo and Tribeca who feel that Gerson has done nothing for eight years and then allowed High-Rise Mike another four as a sort of dictator.



Margaret Chin began her campaign at the end of last year and has gathered momentum. She has carefully assessed her chances and is expected to make a solid showing but is one of the dark horses in this race. Her identification with Chinatown is both positive and negative – a strong voter base but a knotty problem with a perceived provincialism. Almost no one looks to the “Communist” label, which was used against her in the past as negative any more - not a few find it charming and oddly nostalgic. Her experience in housing reform, community organizing and social activism are potent strengths.



Evan Lederman, a darker horse, is a newcomer also contemplating entering the fray. His bona fides include membership in the elite law firm of Cravath, Swaine and membership in Community Board #2 where he is Chair of Street Activity and Film Permits. He was also President of NYS Young Democrats. As of this writing, he confirmed considering a run but has not formally decided.




Last, but certainly not least, is the darkest horse. Irrespective of her strong points, not the least of which is a set of judicial robes and having done the job before Gerson, Kathryn Freed is not completely out of the picture. While she will not confirm her intentions – since she already gainfully employed as a Civil Court Judge – there is always the possibility that will have a change of heart. Or, perhaps, a change of direction. That’s a dark horse with a wild card.

As this heats up, we’ll watch the sparks fly.

Political Realism

I believe we are on an irreversible trend toward more freedom and democracy - but that could change.
-- Dan Quayle (1947 - )


One of the problems in dealing with the current realities is that it is often not pleasant. A Hobson’s choice comes to mind. But, as we all know, not making any choice at all is giving way to a degree of pessimism that makes this blog seem positively serendipitous. Remember, though, if we can’t get what we want, we may get what we need.

There is no secret, for example, that Bloomberg, who is both arrogant and narcissistic (basic requirements for politicians) is probably qualified to lead in these parlous times. Of course, he’s not the only one. Tony Avella is an activist who inspires trust. Bill Thompson is the Comptroller for God’s sake, he knows numbers. Weiner is a hard worker.
Even Chris Quinn, who helped Bloomberg and may now regret it, seems a hell of a lot more human than he does. She’s tough, talented and real.

The fact that Hi-Rise Mike is worth only $11 Billion now instead of $20 Billion that he was approaching during the bubble, simply means that he is feeling a bit more human. But, why bother running again? Oh, right, the narcissism.
There’s also the problem that, as one insider described, “he’s a prude.”
Nightclubs are closing as a result of phoney drug busts, Disney has moved in, Dominatrices have been arrested or moved out (courtesy of Feinblatt who runs the Mayor’s Task Force) – and Sin City is now Disneyland East. Convictions are easily obtained because the money dictates, along with his underling Ray Kelly's corrupt cops, just who gets real justice. In two recent busts of NYC Dungeons, for example, the cops who “investigated” and extensively surveilled each had four sessions of roleplay on the taxpayers dime before they arrived with a battering ram and made off with $100K in cash. Apparently, to Feinblatt, the cop who receives the attention of a young lady in leather is entitled to "hazardous duty" pay scale for numerous visits.
A well-known principle of Criminal Justice, were you to ask a reputable defense lawyer, is that cops perjure themselves but judges accept anything they say in State Court. But even deep pockets do not ensure Justice when the prosecutor is holding all of the cards.

So, the money has cleaned up Manhattan and soon the Death of Fun will be our new moniker instead of Fun City. But Manhattan used to be, well, Manhattan. Now, Daffy Duck will excite the tourists from Idaho.
The real problem for all of us is that what we used to accuse the Mob and criminals of doing (lying, stealing, cheating and making a mockery of justice) – is now what prosecutors and the cops do when politicians want something accomplished quickly. They go directly from political decisions to fait accompli – no constitutionality or messy legal questions in between.
Giuliani was bad but at least he had charisma. His father was a mobster and he understood.

So Bloomberg will now be re-elected because he has managed the media situation and can afford to cram it down our throats. And, never expect to get past Ray Kelly’s dislike of bloggers for press credentials. Once on the ballot, the PR and the pressure will continue and we’ll have four more years to sanitize Manhattan. We all know that we’ve been managed.
But, let’s not allow each other to believe that this is anything more than a high-level con job. In The Grifters, it was called “the long con.”

A footnote to the Kennedy Senate matter brings us to a few salient points.
First, the fix was in once the Kennedy clan supported Obama and no doubt contributed to putting him over the top. That negotiation was clear.
Caroline may not be the most experienced candidate but, irrespective of the royal family fantasy, she wants the job, is bright and connected and is also NOT corrupt. We should appreciate the clean linear quality that is far from Joe Kennedy but not so far from Robert Kennedy. Idealism was their hallmark. While the brothers paid the price for moving off Joe’s script, and contrary to Henry Stern’s opinion, Robert was not a New Yorker and knew little about our state when he ran. It was simply an available Senate seat. It was a vehicle and he almost immediately became a national figure who did little for our state. Of course, most of us didn’t mind since he was going to replace JFK for many of us.
The notion that Bloomberg is a Kingmaker in this matter is insulting. He may be waiting in the curtains (perhaps arranging a late curtain call when Caroline moves up the ladder) but Teddy sealed the deal earlier on.

Historic Shifts

It's a recession when your neighbor loses his job; it's a depression when you lose yours.
--Harry S Truman (1884 - 1972)

One of the problems with the blame game affecting the views of our contracting economy is that we fail to recognize the seismic shifts that occur among populations ranging from aging baby-boomers to new births – as well as flows of capital, business cycles and markets. The ebb and flow of capital and degrees of risk and risk-avoidance – as well as major financial cycles -- are outside of our control. Some of these sometimes generational factors are completely independent of toxic financial vehicles likes SIV’s and CDO’s and whether Bear Sterns or Lehman Brothers have taken the pipe. The shell games going on in corporate America are as much a result of the cyclical forces as they may be the cause of current pain. Even the Madoff fiasco is a symptom, not a cause. In short, nothing that the Federal government or we can do will alter what is about to happen.

We are entering a deep Recession that will become a Depression by 2011. During that segment in our history there will be a stock market rally lasting for perhaps several months, a very brief improvement in lower end real estate numbers and a resurgence of inflation – but will shortly be followed by an even more calamitous collapse.

Knowing this may or may not prevent the S.E.C. or D.A.’s office from trying to blame individuals for what is about to happen. But, it’s important to know that there is no correlation between specific events and the macro cycle we now face. The events we are about to witness are cyclical and inevitable. Those macro events currently affect the evaporation of capital, the downsizing of business and the deflation (and inflation) about to ravage the economy. The inflation, which will occur within the next year or two, will be short-lived and prepare us for the precipitous drop shortly thereafter.
Credible predictions for the local economy in Manhattan and the Hamptons see the loss of 4 to 5 million jobs, a reduction in the number of retail companies and stores through closure or bankruptcy, and a further deflation in the value of real estate. In the Hamptons, home prices will have fallen by 50% by the end of 2010. According Harry Dent author of The Great Depression Ahead, in order to arrive at values consistent with long term trends, real estate must drop between 40 and 60 percent from 2007 values in order to attain balance.

In Manhattan, where prices have just started to drop – meaning, that brokers have finally admitted that it is happening – the slide has just begun. Projects have stopped in some locations and commercial real estate will deflate at an alarming rate – which will cause bankruptcies and rents to drop precipitously. Harry Macklowe’s tribulations are a symptom of what will happen to many major developers and landlords.
Manhattan apartment rentals have already started to drop and we are only at the beginning of what will become a full-blown Depression by the end of 2010 to 2011. The reduction in services in Manhattan will be difficult to believe and the quality of life stemming from the relentless fines and fees that Bloomberg resorts to will sour any positive feelings towards his Savior image. A respite to this scenario may not occur until 2013 to 2016.

In the Hamptons, an economy that is entirely built and paid for on the backs of New Yorkers who buy summer homes and investment property, the only question is whether a Chapter 11 is in their future. In recent months, one broker described his business succinctly, “the phone doesn’t even ring.”
A broker in East Quogue reported that even the houses in the $300,000 to $500,000 range are not selling. Many McMansions have already dropped by 50% in value (if not price) – and have further to go on the downside.
There will be a modest upsurge in Hamptons real estate activity as people try to rent a summer house and pool their money to share it – as the Code Enforcement police (who will be getting pink slips along with many more of the Town of Southampton’s employees this year) try to fine and criminalize this last and only form of income.
Regardless of how Southampton Town or East Hampton Town treats this brief shot in the arm for the summer season, after the Spring “selling season” is over the slide in that economy will start in earnest. The deflation in real estate will be the new long-term trend – along with the tax base that once propped up the local economy. The brief resurgence of $200/barrel oil (which will collapse again to $30) will exacerbate local conditions that are made worse by with a corrupt political bureaucracy. The
flow of easy money in the Hamptons is gone and this will end decades of political incompetence.
Look for oppressive attempts by the local governments to squeeze money out of tourists and property owners who will abandon properties in growing numbers.

While the towns in the Hamptons might seek a political solution by reaching out to New Yorkers in order to solve the impending disaster by working together, that will not happen. Lip service was once given about hiring a Public Advocate to bring New Yorkers – who pay for the economy – into the local political process but until the vote is garnered that would not happen.

Sell all real estate if you can and buy 30-year Treasury Bonds. It will be a long and difficult ride. Even buying food (which will escalate in cost) will become an issue for many families.