EVERY big newspaper has conflicts of interest – yet most publishers manage to be subtle about promot ing their extracurricular agendas. Our distinguished opposites at the Daily News, however, seem guided by the principle that “desperation is blind.”
How else to explain yesterday’s shameless column in the News headlined, “How to get NY building again”? The piece called for a publicly backed fund to bankroll commercial real-estate projects – but the article didn’t note that this could be the salvation of News publisher Mort Zuckerman.
The author was one Avi Schick – “who served as president of the Empire State Development Corp. from 2007 to 2008,” we were informed. Of course, he is cur rently the chairman of the Lower Manhattan Develop- ment Corp., the agency that has so far failed to dismantle the Deutsche Bank hulk at 130 Liberty St. – the only major job for which it’s still responsible.
But maybe reminding readers of the LMDC’s sorry record would have undercut Schick’s credibility in arguing that the state and city should divert $2 billion of the $200 billion in pension funds they manage to set up a fund to finance commercial real estate.
That’s not all, says Schick: “Once this capital is set aside, a similar amount should be raised from union pension funds, banks and others.” How about having fund-raisers stroll through subway trains to beg for any change we can spare?
Schick’s taxpayer-soaking plan would only pile more catastrophe on an industry that’s mostly itself to blame for its plight – and which is inextricably bound up with the faltering News’ fortunes.
News publisher Mort Zuckerman is also the chairman of the publicly traded real-estate company Boston Properties. Boston, America’s largest commercial landlord, has gotten itself into a pickle in Manhattan that threatens the finances of the whole company.
A few weeks ago, Boston announced it was “suspending” plans to build a skyscraper at Eighth Avenue and 54th Street because a prospective tenant had decided not to move to the new building. That left Boston with nothing to show for a half-billion dollars already spent except a giant hole in the ground.
That followed the collapse of another big development eight blocks south on Eighth Avenue, where Boston was partners with Related Cos. At that locale, Boston reported a $23 million charge.
Over-reaching has cost Boston dearly over the past 18 months. The company reported a $188 million writedown on three Manhattan towers it bought from Harry Macklowe last year that are now worth much less than what it paid for them, and saw its fourth-quarter results plummet by 96 percent over the previous year.
It’s regrettable that Boston pulled the plug on its 54th Street project, a handsome building that would have been a fine addition to the cityscape. But the company is caught in the same predicament as every other developer that can’t borrow at rates affordable enough to put up new office buildings unless they’re mostly pre-leased.
Zuckerman is sweating buckets over the credit crunch, which has paralyzed his development schemes and threatens to leave his shareholders high and dry.
It would be one thing for him to admit as much and publish a plea for a governmentally mandated, public-private bailout under his own byline.
But it’s beyond tacky to pimp out the propaganda job to Schick. And it’s ridiculous for Schick to make a case so flagrantly in service of Zuckerman in the name of the future of the state and city.
A more honest headline would have been, “How to get Mort building again.” But it might not have had quite the same philanthropic tone.