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"Why should people get to see plans? This isn't a public project."
Bruce Ratner in Crain's Nov. 8, 2009

Main Ratner "Community" Partner B.U.I.L.D Reported to Attorney General for Financial Shenanigans

Hello? Mainstream media? New York press corps. Today Norman Oder has provided an exclusive for you to run with. And it makes much better copy than loving attention paid to Bruce Ratner eating and the merits of Mikhail Prokhorov's team's logo.

See this story doesn't quite fit the mainstream media narrative of yay Jay Z, yay rust, jobs and housing who cares. This one is about Ratner's main "community partner," the entirely Ratner-funded Brooklyn United for Innovative Local Development, and financial shenanigans reported by its now former CFO to the NY State Attorney General's office.

Do read on:

Job-training group BUILD, signatory of CBA and Atlantic Yards booster, on shaky ground with budget, back taxes, and spending (Nets tickets, rent, precinct council), according to former CFO's complaint to NY AG

The job-training organization Brooklyn United for Innovative Local Development (BUILD), a controversial but intensely loyal source of community support for Forest City Ratner's Atlantic Yards, is on shaky ground, its former Chief Financial Officer has charged in a complaint (bottom) to the New York State Attorney General.

BUILD, which formed as Atlantic Yards was unveiled and has relied on Forest City for free office space/utilities and most of its funding, has seen its budget run low, even as it owes more than $115,000 in back payroll taxes, according to the complaint.

Moreover, the letter charges that CEO James Caldwell has spent money irresponsibly, including for Brooklyn Nets tickets ($8700), rent for five individuals, a car payment, clothing for a subordinate, and for the 77th Precinct Community Council, which he heads. Larger sums were allegedly misallocated to items seemingly part of BUILD's mission--like MetroCards for trainees, part of $38,201 for transportation--but not authorized by its funders.

BUILD's former CFO Lance Woodward, fired August 1 in what he contends was a wrongful act, has urged the Attorney General's Charities Bureau, which oversees non-profit organizations, to investigate. He asks for Caldwell be removed from BUILD, a new board established, and restitution of misallocated funds.

His letter, backed by voluminous appendices, charges Caldwell with misallocating and misappropriating more than $120,000 from 1/1/11 to 8/31/12, using BUILD checks and its credit card.

There's clearly deep tension between the two men, though they were once quite close. Some have described Woodward as "like a son" to Caldwell, who helped the younger man get his footing after he was once homeless.

The dismissal letter Caldwell provided Woodward cited insubordination, failure to perform duties, and lack of proper supervisory performance--none of which, according to Woodward, were the subject of written or verbal warnings.

Caldwell's response: a "disgruntled employee"

After contacting Caldwell last week, I two days ago provided him with a copy of Woodward's seven-page letter. Yesterday, I posed some general and specific questions, including about BUILD's financial stability. Caldwell sent a general response, via Chief Operating Officer Daisy James:

We are of course dismayed that a disgruntled employee, who was dismissed for performance, after we made great efforts to assist him and provide him with employment, would surreptitiously take documents and other materials from our office during and post-employment and provide them to a blogger.
We've worked very hard for nearly a decade now trying to help the most impoverished of our neighbors develop jobs skills and obtain jobs. We've done this in one of the most difficult economic environments in our City's history.
We will of course review carefully the document you provided, along with counsel, and will respond directly to the Attorney General's office. We are not going to have a conversation about Mr. Woodward's allegations, or why we believe he would do this, via the media or your blog.

"I truly believe I had a fiduciary responsibility," Woodward said, regarding his provision of information to the Attorney General, including information gathered from BUILD financial accounts--passwords left unchanged--in the month after his dismissal.

Budget troubles

It's unclear how much the allegedly misappropriated spending--if the complaint is accurate--was aimed to benefit Caldwell directly or to serve as an old-fashioned neighborhood benefactor. The letter cites spending on gifts and charitable support for neighborhood organizations.

Other spending deemed misallocated, such as on graduation ceremonies for those in BUILD's customer service training program, seems mission-oriented although, according to Woodward, not permitted under the spending guidelines established by funders.

BUILD's main funder has been Forest City Ratner, via its Atlantic Yards Development Corporation (AYDC), which in the fiscal year that expired 3/31/12 contributed $340,000, plus free rent and utilities likely worth more than $40,000 a year. The Consortium for Worker Education (CWE) and other job-training groups have also bolstered BUILD's budget; last year, CWE gave $65,000.

Woodward said he attempted to raise the issues of off-budget spending and the need to pay taxes with Caldwell but was rebuffed. Beyond the issue of fiduciary responsibility, he may sue for wrongful discharge.

While BUILD does have a repayment schedule with the IRS, reducing the debt may not be easy. According to Woodward, neither  Forest City nor CWE promptly renewed their most recent rounds of funding, which expired at the end of March and of June, respectively. A CWE representative said yesterday that "we are currently in negotiations with BUILD." (I queried Forest City last night and will add their response if I get it.)
...

 

Woodward and some fellow former employees, believers in the organization's mission to help serve Brooklyn's vast number of unemployed, have expressed dismay about BUILD only in its most recent incarnation.

But BUILD, formed around the time Atlantic Yards was formally announced, has faced broader criticism before. Co-founder Darnell Canada left BUILD in March 2004, just a few months after the launch, stating, "I am resigning out of the need to distance myself from those in the organization who see this organization as financial self gain, [rather] than for the needs of the Brooklyn community." Canada, who died in May 2011, never offered further clarification.

BUILD, whose officers and staff, including Caldwell and Woodward, had been volunteering their time for about a year and a half, began to receive support for Forest City Ratner in August 2005, two months after they signed a Community Benefits Agreement (CBA). The CBA, though billed by Forest City as "historic" because it was the first in New York, differed from benchmark CBAs in Los Angeles because the groups in Brooklyn were all supporters of the project from the start.

Though Caldwell and former Chief Operating Officer Marie Louis accurately denied earlier charges that BUILD was funded by Forest City, by September 2005, such denials were dishonest. A 10/14/05 New York Times article revealing the payments nevertheless proclaimed the CBA as representing a "modern blueprint" for harvesting public support.

(BUILD also erroneously claimed it expected $5 million in support from Forest City, a sequence played up in the documentary Battle for Brooklyn.)

The organization was rocked by a lawsuit filed last November by seven participants in a coveted pre--apprenticeship training program who said they were promised jobs and union cards and required to go through unsafe, unpaid training. That lawsuit, which names Caldwell individually, BUILD, and Forest City among the plaintiffs, remains pending. In that case, Forest City's lawyers also represent BUILD.

Still, Caldwell and Louis recruited many people, especially from their base in Prospect Heights and Crown Heights, to toil as volunteers and then work for relatively law pay. BUILD, though new to the employment services field, has in its current office regularly busy with walk-in visitors seeking jobs and getting basic help with such things as job search and resume preparation.

BUILD has not met its charge under the CBA to prepare people for high-paying jobs at Atlantic Yards, but it had--as of May--placed 460 people in lower-skilled jobs, including at Forest City's malls. It put several cohorts of 25 people through unpaid Customer Service Training, and played a role in recruiting people for the 1900 part-time jobs at the Barclays Center, though it's not clear how crucial that role was: the city's Workforce1 service took charge.

All the while, BUILD, which didn't so much negotiate as embrace the CBA, provided people to rally for Atlantic Yards. Caldwell, who according to 2010 IRS filings earned $64,000, has enthusiastically supported Forest City's plans, whether or not they have much to do with BUILD's mission.
...

Complaint to NY Attorney General about BUILD (address redacted)

BUILD 2010 IRS Form 990 and Audit

Read the whole article.


It sounds like now that Forest City Ratner doesn't really need the astro-turf cheerleaders they may stop funding BUILD.



Posted: 9.27.12
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Eminent Domain Case
Goldstein et al v. ESDC
[All case files]

November 24, 2009
Court of Appeals
Ruling

[See ownership map]

EIS Lawsuit

DDDB et al v ESDC et al
Click for a summary of the lawsuit seeking to annul the review and approval the Atlantic Yards project.

Appeal briefs are here.

2/26/09
Appellate Divsion
Rules for ESDC
What would Atlantic Yards Look like?...
Photo Simulations
Before and After views from around the project footprint revealing the massive scale of the proposed luxury apartment and sports complex.

Click for
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"Atlantic Yards" documentary
Brooklyn Matters


Read a review
-----------------------
Atlantic Yards
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