Menino and Vornado

http://www.futureofcapitalism.com/2010/04/menino-and-vornado

The Wall Street Journal has an article about a battle between Boston Mayor Thomas Menino and Steven Roth's Vornado Realty Trust over the Vornado's lagging pace on a development on the old Filene's Basement site in Boston's Downtown Crossing. Reports the Journal:

last month, Mr. Roth sparked Mayor Menino's ire by publicly suggesting that he had intentionally let the former site of Alexander's department store lie fallow in New York City in the 1990s.

The New York Observer quoted Mr. Roth as saying at a lecture at Columbia University, "Why did I do nothing? Because I was thinking in my own awkward way that the more the building was a blight, the more the governments would want this to be redeveloped, the more help they would give us when the time came."

That got Mr. Menino mad. The Journal article goes on:

Mr. Roth, through a spokeswoman, declined a request for an interview. But he never requested or received public funds to develop the Alexander's site, according to a source close to the company. The skyscraper that Vornado did eventually build on the site is now home to Bloomberg LLP.

The Journal lets that claim by the anonymous "souce close to the company" slide unchallenged. We'd bet a dinner at the Rubenstein family owned Peter Luger Steak House that this "source close to the company" was someone at Rubenstein Associates, a public relations firm that represents both Vornado and the parent of the Wall Street Journal, News Corp.

In this case Vornado is getting better service from Rubenstein than the Journal's readers are, because the claim that Mr. Roth "never requested or received public funds to develop the Alexander's site," while technically true, is so far from the underlying reality of the situation that you can understand why the person profferring the claim would want anonymity.

While it's true that Vornado didn't ask for public funds for the Alexander's site, its anchor tenant for the development, Bloomberg LP, did, and was all set to receive $14 million in tax incentives in connection with the real estate deal, incentives that in practice would have benefited Vornado as much as Bloomberg LP. When Michael Bloomberg was elected mayor, he turned the incentives down to avoid the appearance of a conflict of interest. The whole story is told here on the Good Jobs New York Web site, which is terrific.

The Journal also fouls up Mr. Menino's quote about his shopping adventures at Filene's Basement. "Anything that was on sale I'd buy. Oxford suits, Zegna suits. You know how expensive they are." I think the mayor meant Oxxford suits and the Journal misspelled it.

by Ira Stoll  |  Apr 14, 2010 at 8:40 pm Related Topics:  New York, Press, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list