By Jason Safford, Senior Managing Partner, Advantage International Management
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Leadership, by its very nature, requires the ability to motivate people towards accomplishment of specific tasks, which will result in attaining a bigger goal. Most often, this is done by creating a vision of the future, which enables a leader to inspire people with hope. As the major developer of the Atlantic Yards project, which includes the Brooklyn Arena that brings an NBA team to Brooklyn , Bruce Ratner has thus far created that vision of hope. The goal, which all “Brooklynites” and New Yorkers should be focused on – our city will be greater than ever. More importantly, Brooklyn will have its first professional team since 1957, when Brooklyn's beloved Dodgers moved to California .
The vision, a $3.5 billion project, provides incredible opportunity for the people of Brooklyn , the city, and the state. It has garnered the support of Gov. George E. Pataki, Mayor Michael R. Bloomberg, Borough President Marty Markowitz, and several key community leaders. It has created a buzz among the people in Brooklyn , and spurred business interests in an area that was otherwise depressed. At the very least, it improved real estate prices in the immediate area long before any ground was broken, and any real guarantees were made.
But Mr. Ratner did not stop with creating the vision; he has committed to making it a reality. In 2004 he led a group of investors, including rapper and CEO of DefJam records Shaun Carter (aka Jay-Z), one of Brooklyn 's own, to purchase the New Jersey Nets. In September, his bid of $100 million was accepted by the MTA for the development rights over 8.5 acres of the Vanderbilt Yards at Atlantic Avenue in Downtown Brooklyn. Most importantly, Mr. Ratner has taken the bold step of wooing community groups guaranteeing that they will have a fair share of the benefits flowing from construction.
The Community Benefits Agreement (CBA), signed by Bruce Ratner and his company Forest City Ratner, Mayor Bloomberg, and eight local community organizations in Brooklyn , guarantees certain percentages of the projects within the $3.5 billion budgeted will be awarded to the local population and minority and women owned business enterprises (MWBE's). These guarantees include the following:
• Not less than forty-five percent (35% minority, 10% women) of all construction work will employ minority and women construction workers.
• Forest City Ratner must assist with setting up Pre-Apprentice Training, creating a Project Labor Agreement, and a Construction Workers Labor Exchange, so unqualified and non-union labor can be trained for jobs.
• 8% of “professional service contracts” awarded to MWBE's
• 30% of total construction contracts awarded to MWBE's
• 20% of Post Construction and Concession Activities awarded to MWBE's
• 15% of gross retail leasing space will be awarded to MWBE's
• 50% project housing units will be affordable housing
• 10% of housing will be senior housing
In addition to the jobs and opportunities that are guaranteed, as a part of the CBA Mr. Ratner must also work with the local organizations to build a new high school for Engineering & Construction, provide a space for a Health Care center, create an MBA intern initiative, offer housing relocation for families residing in the area, and establish a sports foundation for funding disadvantaged community programs and non-profit organizations. There is one stipulation – these groups must be able to perform or find the resources to perform their tasks within the agreement, or Mr. Ratner can buy his way out of the whole deal.
Courage is leadership by example. The fact that Mr. Ratner actually signed such an agreement, one that forces him to interact positively with the local community, is probably the greatest risk of the entire project. His courage to take action demonstrates a quality that is lost all too often by those who are in the position of leadership. Courage gives a vision life, and motivates people into action to reach a bigger goal.
Unfortunately, this bigger goal – city representation through professional sports, better housing for city inhabitants, new commercial developments to improve a weak economic area, new jobs and opportunities for small businesses, more revenue for the city, has not persuaded many in Brooklyn. A number of business people, politicians and community leaders oppose Mr. Ratner's project. There is even a group called Develop Don't Destroy Brooklyn gathering support against the development. There are cries that the community groups that signed the CBA were bribed to support the project.
Such squabbling will cause Brooklyn to squander a great opportunity. The challenge now, for Brooklyn, its people, leaders, and politicians must be to work with the developer to make the Atlantic Yards and Brooklyn Arena project succeed. Its success will make Brooklyn even greater. At the heart of economic development is the willingness of public and private entities to work together for a greater good. The CBA, signed by those public and private organizations, represents the heart of one of a truly ground breaking approach to economic development.
But there is a serious concern. It is unclear if the groups who signed the agreement with Forest City Ratner can deliver. The CBA is an outline, at best, of the vision of how the project will reinvigorate the adjoining communities. The question is can those community groups perform the tasks assigned? Many task requirements are vague and require knowledge and experience far beyond the members of the signing organizations. Through no fault of their own, the community organizations that signed the CBA have also risked a great deal, because they must mobilize substantial numbers of workers, professionals and local entrepreneurs in a relatively short period of time.
The caveat to economic development is that a great deal of work is required from all participants. For Mr. Ratners' part, he has taken the bold step of risking his reputation towards building a greater vision of the future. But if we do not take the bold step to follow him and help create this greater vision of Brooklyn , we can only hold ourselves accountable if he fails.