Queens Emerging June 1, 2001 [Day 2] : Reinvesting In Existing Neighborhoods

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MR. WOLLMAN

WOLLMAN: Good morning. I'd like to welcome all of you to the second day of the New York City Real Estate Forum 2001 Roundtable, Queens Emerging. On behalf of Baruch College and the Steven L. Newman Institute I want to welcome you again. It is wonderful to see so many people in Queens here and I know sometimes that barrier between Manhattan and Queens can seem larger than it is and more important than it is and one of the strengths the roundtable series among the institutes annual conferences is our ability to really think and talk for a few hours about one city among all the boroughs and all the diversity of what makes New York what it is. This is the second of three days; three mornings in June which means casual so all of you men with coats on or jackets on should feel free to relax a bit today. We purposely tried to think about what a Friday morning in June ought to be in terms of real estate issues and the future of the city. It is always the challenge for us as we put any of our seminars or conferences together but especially in the roundtable series to walk that line between trying to be comprehensive and including all the key issues that a borough faces in terms of New York 2001 and try to be manageable in terms of your own time and attention span. We appreciate very much your tolerance. But on that degree we have made one small change here in this morning's program, which is after the first three case studies of the morning we are going to take another coffee break and there will be food and give you a chance to talk to the speakers and talk among yourselves and then we will resume for the second part and for the final presentation; a very interesting one by Joseph Mattone, the Chairman and CEO of Mattone Group.

So, on that note and with just one more thing the transcripts of the conferences and the summaries of the conferences and the transcripts will be available on the Institute's internet site which we are working on hard right now and that will be done by September. The issue of Properties will be published. So I urge you to contact the Institute office or watch out on the Institute's website for the more permanent record including many of unusual materials which have been presented to you last week, this week and will be done next week for your own note taking.

It gives me great pleasure to welcome as really someone to review -- someone who really almost needs no introduction. Ned Regan is the President of Baruch College and the City University of New York. Located in (inaudible) Baruch's three high quality schools attract the best of the city's high school graduates as well as international group of students from (inaudible). Mr. Regan was New York State Comptroller for 14 years from 1979 to 1993. Ned is no stranger to the public policies issues that are in the substance with what we are doing here and to the attempt on the Institute's part to bring together public and private sector entities discussing the future of the city. The Comptroller's office with 2,400 employees is responsible for accounting, auditing, a financial oversight function for state and local governments with special emphasis on New York City during the fiscal crisis. Please join me in welcoming him.

MR. REGAN

NED REGAN: Thank you and welcome to Baruch and maybe our next conference will be in this fine building. This is the Newman Center, who Bill Newman we owe a lot to. Across the street is it is going to open in maybe two and a half months the finest urban campus that we know of in the United States. Those of you in the development field know we'll call it Spec Quadrangles where each floor we recreated (inaudible). Created the typical campus environment. You go from the physics department over to the faculty lounge and then back to the English department. If you walk across the typical quadrangle you have spontaneous interactions. Student faculty, and a great learning networking process takes place. Each one of our teaching floors is built around that concept to recreate in an urban area something we think is very, very unusual. One of the conferences we are going to have after it opens will bring together architects that I've met here already and educators or preferably people who design a campus or educational site and to critique -- it is going to be international because I don't think they make buildings like this (inaudible) to critique the building and its interior exterior, but mainly interior design to see whether or not just that alone can improve education. Now, I think the answer is yes, but we'll put a bunch of experts in the room. Hopefully some of you will join us and see whether or not you can do it just by the skills of which you all possess.

Let me just conclude a very brief welcome on the subject that you are all here today and that is neighborhoods, in Queens specifically. I got to know three neighborhoods since in Buffalo. I am going back 40 to 45 years now. The city of Buffalo, not its suburbs. The city of Boston, not its suburbs and I'll say the Borough of Queens and not its suburbs. I watched especially in the early, with a politician's eye the destruction of neighborhoods usually courtesy of the federal government as our slash, burn and move on frontier society, the hell with land use control mentality in this country and it has been witnessed for generations and still will be witnessed for generations. But when you get the federal government hooked up to that kind of a horse, destruction follows and it was urban, most of you are not old enough to remember urban renewal and what it did to neighborhoods. Urban removal is what it came to be called and was even worse than that. But it would destroy neighborhood after neighborhood. All the mayor had to do was send in the fire inspector and the health inspector and these older frame houses, of course, had a few things wrong. Declared that. In comes the Federal Government. In comes a demolition contract and maybe ten years later there are new houses. In the meantime everybody left. Great ethnic, religious neighborhoods broken up. You had highways and sewer lines and the water lines all built courtesy of taxes to populate the suburbs and you got the condition that wrecked a number of cities.

Fortunately, 40 years later I am lucky enough to watch a revival and probably a revival of these neighborhoods caused by the same people who create them in the first place. Wave after wave of new, ethnic immigrants created the great neighborhoods in the three cities I've just mentioned a hundred years ago and now recreating them again. Maybe it is suburbanite or two that got tired of the blandness of suburban America and so I think this conference is amazingly timely. I asked myself as I was going through, Joe and I were talking about whether or not we could have held or whether or not Henry and Bill Newman, his mentor, could have held this conference just five years ago. I don't know. Probably, yeah. So there is something occurring and I am very proud in this country, its healthy, it is great, it is civicly good, socially good, economically good and it brings people together in just the right environment. Something is occurring and I am so happy all of you are not just participants, you are activists and the reason we have this conference is because of you and because of the community in which you're working so hard to recreate the good old days. So thanks for coming here to the great suburb with me. We are delighted to have you here. Thank you very much.

MR. WOLLMAN

WOLLMAN: Thank you. Our thoughts today as they were last week are very much with Claire Shulman. Unfortunately, again Claire is not here today and not even in the east yet today, but we do hope very much she'll be able to join us for the final day next week. I think she would have been proud and maybe slightly amazed at the left of interest and sense of turn out across the city as a whole in regard to the issues of the future of Queens. So, I say again our thoughts are very much with her.

Since June 1986 Peter Magnani has been Deputy Borough President for the Borough of Queens. He knows where all the bodies are buried, where among other duties he is responsible for capital budgets, land use issues, parks, infrastructure, economic development, and strategic planning. A sort of mild portfolio of responsibilities. He also represents the Borough President on the Queens West Development Corporation Board of Directors. Prior to assuming his post as Deputy Borough President, he served as Director of the Queens Office of the New York City Department of City Planning. He also served in a similar capacity of the Bronx Office of the Department of Planning. Prior to his government service he worked at a number of firms as a professional architect. Among other projects was responsible for drawing up plans for a children's psychiatric hospital at a public school. Please join me in welcoming Peter Magnani.

MR. MAGANI

PETER MAGNANI: Thank you very much, Henry. Before I start I would like to thank my staff for helping myself under very difficult circumstances. I know we have a lot of staff here today and it takes a lot of work to make these presentations. I would just like to thank my staff who is here from my office in helping myself and other people in the office under these trying circumstances. Well, good morning. Last week we spoke about the -- I spoke in place of the Borough President Claire Shulman and at the time I discussed the significant issues we need to confront if we are to have a successful future. Today I've been asked to review the strategic assets specifically talk about housing issues. Assets of any geographical area give it a sense of place. When I go on vacation I, like many of you I am sure, try to understand what are the qualities that make it attractive and I can't help but evaluate it from a very personal perspective. Is there a mix of old and new? Is the population diverse? What sort of housing or jobs or recreational opportunities are available? What is the quality of the cultural venues and institutions? How easy is it to get around? My records point of course to Queens. A major center of commerce, technology, diversity residential choices, culture and recreation. Yes, the shadow of Manhattan is there, but it is receding. Queens is coming into its own. I believe that if city planners were to build their own new town they would be hard pressed to come up with a better mix of neighborhoods and opportunity we have in Queens. I would even suggest that many suburbs would love to grow up to be just like Queens. I think that is what is happening in Queens.

Queens' strategic assets include its diverse population and work force. Two major airports which not only provide access to the rest of the borough, but are also major employment centers, excellent public transportation, solid residential neighborhoods, public and private educational institutions, the best school districts, major sports facilities like Shea Stadium, television and film studios, and other recreational activities. Queens is the largest borough in terms of land area; a hundred and 12 square miles with more than a hundred miles of waterfronts. The highway system and our public transportation network provide great opportunities for commerce and residential development. Not only is Queens the home of recent arrivals to the United States, but also a place where many people who have lived in the city for many years choose to settle. There are a hundred and sixty seven nationalities speaking over a hundred and sixteen languages. The current population is 2.2 million so half of the increase of the city's population occurs in Queens. Queens' population increased about three hundred thousand people from 1990 to 2000. You notice the trend of emptiness was from the (inaudible).

When we talk about Queens being the most diverse county in the whole country and probably the most diverse county in the whole world when you think about it. I think it is really in the forefront of what we call the global economy where cultures intermix in one place and there are exports and imports coming in all over as well as people. So I think Queens is really a perfect example of that. Probably in the forefront of any community in this country. As an example, our excellent trained work force with diverse skills to keep up with a new and changing economy. Attracting appropriate labor has not been an issues for Queens based businesses, especially those seeking employees who vary in language skills. Many of the newcomers to Queens are educated. They are doctors. They are architects. JFK and LaGuardia Airport are vital components not only to the Queens economy, but to the region as well. The airports help make the city the commercial capital of the world. Ten of billions of dollars in construction, tourism and other commercial activities are all directly attributed to the airports. More than forty seven thousand workers keep the airports functioning. Another two hundred and seventy thousand jobs in the region are generated by aviation to related businesses. The diverse housing stock sports different lifestyles. Newcomers, and natives, individuals and families, young entrepreneurs and retirees all make Queens their home because of the variety of the housing types. We have multiple story apartment buildings. One and two family homes, garden apartments, cooperatives, condominiums, luxury housing along the waterfront, public housing, subsidized housing, assisted living and mansions are some of the housing choices available. There are a number of planned communities in Queens. Jackson Heights, Sunnyside Gardens, Forest Hills Gardens and Flushing Meadows.

Jackson Heights consists of mid rise apartment buildings, shopping and public transportation access. The core of Jackson Heights, the two block area with buildings that have significant English and Spanish architectural futures. Forest Hills Gardens is a mix of apartments and private homes. It resembles an English village complete with shops, small offices, schools, and parks. The area derives its charm and character from excellent architecture and landscaping. The area has a commuter rail station and a handsome main square (inaudible). Fresh Meadows with its hundred and fifty acres of lawns, curving streets and low buildings is a rental housing community. There is a major shopping center, multiplex and express bus service to Manhattan. Co-ops are an excellent affordable home ownership alternative. Boulevard Gardens, Bay Terrace are prime examples of cooperative living in the bore borough. We have excellent schools. We have two hundred and sixty-five thousand students attend public schools in Queens. Queens students out perform students of other boroughs in reading and mathematics. Over twenty thousand new seats are in the (inaudible) so many thousands more are needed. The construction of the Queensboro Bridge in 1909 and the opening of the subway lines in the 1920's had a significant impact of the growth of the borough. In 1900 the borough's population was only a hundred and sixty three thousand. However, by 1930 the population grew to over a million people. There are nine hundred thousand passengers that use the subway daily. The 7 line subway stops at Main Street, Flushing which is the largest transfer point in the county with about sixteen thousand transfers in bus and subways each day. We have more than four hundred parks and play grounds and more than seven thousand acres of park land. Flushing Meadows' Corona Park is twice the size of Central Park with one 1,255 acres. Within the confines of the park are Shea Stadium, the Hall of Science, one of the top ten science museums in the country, Queens Museum, Theater in the Park and the Queens Wildlife Center. We also have four miles of boardwalk on one of the best beaches of the city located one half hour from Manhattan. Preserving our borough requires regular investment and maintenance enhancing each community's infrastructure. This is crucial so we can expand our capacity to continue to absorb new residents to the borough.

I would like to briefly review some of our major projects. In Flushing Meadows, Corona Park, we probably have put about two million dollars in infrastructure since 1986. We are expanding the Hall of Science which is an eleven million dollar expansion. Approximately fifty-five thousand square feet of expedition space. We are building a new pool and skating rink. The new pool will be an Olympic standard with seating for about fifteen hundred people and the skating rink will be NHL standard. Ice skating hockey leagues, are a big recreation elements in Queens and this will fulfill. We are expanding the Queens Museum and Theater in the Park. In southern Queens we are planning the construction of the African American Hall of Fame, a nineteen million dollar project which will be dedicated to honoring the contributions of the African American community.

In Jamaica, we are planning the renovation of the Dutch Reform Church. This is slated to be an art and cultural center in a historic setting. We just predicts about six million over the next two years to help with the completed renovation of the church. In South Jamaica the first green building built by the city. In Flushing the seventy-six thousand square foot library on Main Street includes state of the art completed facilities. It is the busiest branch in New York State and recently received the American Institute of Architecture New York (inaudible) Award for its excellent architectural element. One thing that I try to do personally being an architect is to make sure we get the designs (inaudible) I think is one example of our success in Queens and working with EDC and the city to ensure that we get the design (inaudible). The Arcade in Jackson Heights, the 74th Street and Roosevelt Avenue is a subway station bus complex known as the Arcade. This station is the second busiest in Queens. More than forty thousand riders daily. Riders can transfer between the number 7 line and the E, F, R and G lines and buses connected to many parts of the borough. The MTA was embarking upon modernization of the station without giving any thought to the existing Arcade. A terrible mess as you can see by the slide. The city's lease of the site was expiring and it only had plans to (inaudible) the site. Based on our urging the MTA, the Department of Transportation reached an agreement to replace the complex with a brand new intermobile facility which will have an enlarged bus terminal, four new elevators, centralizing access to the subway platform and a new street level full time (inaudible) with additional turnstiles. This is what it is going to look like.

Again, we talk about design here. This is the gateway way to Jackson Heights. When people get off the subway this is the first impression they are going to get as opposed to the old dilapidated Arcade. Queens Hospital Center. This rebuilt hospital will have state of the art facilities and centers of excellence in women's health, cancer care and diabetes. Again, we need infrastructure. We need up to date modern technically, advanced infrastructure to support your communities. This is another example. This is the first new hospital being built in New York City in the last (inaudible) years. Will have two hundred beds. Again, a well designed product of the community. You'll hear more about projects in Jamaica Queens, a downtown air train station development development later today.

We are also rezoning areas of development to help our economy. Long Island City will be rezoned to encourage the development of five million square feet of office retail and residential space and last week we heard city planning give a presentation of what exactly that rezoning is all about. In Flushing, rezoning has been completed to transform unutilized manufacturing districts to office retail and residential uses west of Main Street particularly along College Point Boulevard. To remain vital and competitive we must initiate the policy. Transportation is very vital to Queens as well as to the city. Every world class city has a mass transit access to the airport. Anybody goes to London, you know they just initiated the new express where you can get to Paddington Station to (inaudible) in fifteen minutes. New York City all passengers to the airport must travel in private cars, taxis, buses and limousines on a congested highway. The creation of a fast reliable one seat ride to Manhattan to both Kennedy and LaGuardia Airports are necessary for our airports to remain competitive and will provide a tremendous economic boost to our economy. Borough President has been pushing since she became Borough President for one seat ride in both LaGuardia and JFK. We think the air train is the first step to JFK but we should now aim for a one seat ride to both airports. We need to concentrate on providing a direct connection from Manhattan to LaGuardia Airport. We have been working with the MTA and Transit Authority to extend the N train line to the LaGuardia Airport. In fact, the MTA really wants to do this. They put six hundred and fifty million dollars in there in the most recent five year capital plan to extend the N train to LaGuardia. We are working on some alternatives of that. Next week we are going to have a meeting with the community group to decide on what alternatives to go forward with as part of the Sunnyside Yards, as part of the East Side connection project which will bring Long Island railroad service to Grand Central station to the lower level of the 63rd Street Tunnel under the East River. The tunnel is being extended east. We are terminating just short of the Sunnyside Railroad Yard. What will happen here is a Long Island Railroad will build a station within the Sunnyside Yard right under the Queens Boulevard Bridge that connects Queens Boulevard with Queens Borough Plaza. What this station is going to do basically is give access to -- the subways with Long Island which will help commuters access the Long Island City development area. We have future development sites. Most of the sites in Queens have been used up. But we have a lot of sites developed that really need infrastructure. One such site is the Willards Point area. The fifty-five acre industrial site zoned for heavy industrial use. It is located between the standing West Flushing area, Shea Stadium and has terrific access to the region. It really has great access. The number 7 line stopping there. You have the Long Island Railroad as well as access to the Van Wyck Expressway as well as the Grand Central Parkway. Apparently, it is the home of low end auto related businesses. Junkyards and other uses that generate relatively few jobs and marginal benefits for the economy. The sites proximity to the LaGuardia Airport make it an ideal site for a convention set up, office or a year round entertainment facility or a combination of all three. We need to establish, we are in the process now of trying to establish a development corporation that will advocate and facilitate the redevelopment of the sites. In fact, in the Mayor's annual message he mentioned the Willards Point site as a site that we are trying to -- that we will acquire and build infrastructure for future development.

Aqueduct Racetrack the site is zoned for auto related uses in the heart of Ozone Park. A low density residential community. The New York Races Association has a franchise agreement to operate the racetrack to 2007. In the event that the NRA does not keep its agreement to operate the racetrack, future use of the site is of concern to area residents. The Borough President's office working with the local community board in the development and in the Department of City Planning provided a plan for the site that encourages mixed uses that are complementary in density and character for surrounding neighborhoods. The plan is to develop twenty-five hundred units of low density housing, global and regional retail space with community facilities (inaudible).

Sunnyside Yards. Over the years, this large site east of Long Island City has drawn the attention of development and big plans. In fact, if you look at the first regional plan for New York City in 1929 a rendering of Sunnyside Yards platformed over with a deck, one big (inaudible) right over the intermobile station underneath the yard. So planners have been talking about developing Sunnyside Yards since 1929. Sunnyside Yards I would say is a site that has the best access of any of the sites in New York City. You know, the Amtrack passes through and there is a major facility in Sunnyside Yards for Amtrack. Many people don't know that Jersey Transit trains are stored off peak in Sunnyside Yards. Metro-North can be made to run through Sunnyside Yards without a lot of infrastructure money to provide that access. Then based on what we have in Queens Borough Plaza the subway access, the connection between the Long Island Railroad station which we envisioned as a station that will handle not only Long Island Railroad but Amtrack as well as Jersey Transit and Metro-North and the connection of the subways you would have the best access of any site in the city or the region. I think Sunnyside yards will provide in the future development alternative for the east side of Manhattan and New Jersey.

The problem now is that the infrastructure clause for developing a platform is very expensive. About two hundred dollars a foot. Right now the cost of land will not induce developers to build that platform but over the last three or four years we have had developers come in with proposals to develop portions of the Sunnyside Yards. I think this is the future of Queens as a major development site. We are looking at ample transportation access. Ample acreage to develop mixed use community, basically another city within a city. We are very excited about this.

We must have a comprehensive policy to make development in Queens affordable. We all know the construction costs in Queens are similar to construction costs in Manhattan. Although we don't have the market we have in Queens as we can not support as much product as the Manhattan market can. We have reviewed our strategic assets and I would like to suggest some new policy is needed to encourage the development and enhancing the facility. In housing we need programs that will work in Queens. Again, our borough is not able to tap into the (inaudible) program. Again, this is a Manhattan Queens problem where in terms of we don't have the market prints not high enough to support the cross subsidization of the low income units in the program. Therefore we need help with infrastructure with regard to make this program work in Queens. Infrastructure cost. We have a lot of large sites that can be developed or should be developed for multiple uses. Again, the construction costs of Queens are the same as Manhattan. Therefore me need infrastructure subsidy programs to encourage not only housing development, but office development as well. Most of our remaining sites, large sites lack infrastructure. As I said Sunnyside Yards need a platform. Willards Point needs infrastructure as well as acquisition money. Some of (inaudible) sites require heavy initial investments to get them ready for development. Therefore, one of the things our comprehensive strategic plan is to develop sources of program money in the public sector for infrastructure. That is what happened in Queens West to the sources of the Port Authority, the city and state. Queens West would not have happened if there wasn't a public private partnership to help with the infrastructure costs. We have to streamline a review project. Affordable housing in Queens is -- affordable housing that is built in the city almost always receives government funds to bridge the difference of the cost (inaudible). Developers encourage significant cost per units. Taxes we are talking about is the transfer tax -- just in permit fees alone, we did a study and we estimated there is about thirty-five hundred dollars per units which is of these costs, permit tax costs, tax costs, these are passed along to the buyer.

Parks, we should set aside revenues generated from the events in local parks instead of placing it in the general fund. Revenue generated from events such as the Shea Stadium, Flushing Meadows Corona Park should be retained in Queens so in the facility. Right now all these revenues go into the general fund and are distributed throughout the city whereas these parks are taking the -- the you know -- of these events. So we are advocating that the money should go back into the park and into these venues to maintain them.

We need to do more to support small businesses. More than a quarter of all the businesses around 35th Avenue in Queens have less than twenty employees. While city and state programs provide financial incentives for large companies they do not provide support for small businesses. A lot of small business are afraid of the city program; the economic development program, business assistance program. We do our share with regard to helping. We have a networking counsel that helps businesses apply for their programs but we have to do more.

Business improvement districts. BIDs are effective tools in providing services for many commercial areas. The process for establishing a bid should be more user friendly as many areas interested in setting up a BID have been discouraged by the lengthy process regarding, you know, their budgets have to go through a procedure through the Mayor's office even though the owners and landlord (inaudible).

In conclusion, next where the leadership of the city will shift. It will be our role as government official citizens policy makers to do our best so the progress being made continues. New York City and Queens are testaments to how well people from all backgrounds can work together to form an environment that is conducive to raising a family, business, and nurturing cultural activity. It is our job to make sure that remains such.

In conclusion I'd like to thank Steve Rightstein who is here today for some of the slides and thank Citibank for the book Discovering Queens, handing out the book Discovering Queens that was offered by Steve. Again, I'd like to thank my staff. Thank you.

MR. WOLLMAN

WOLLMAN: Thank you. We are having, as you can sense, something of a hard time with the lights today. The construction next door has -- I don't know, but we are unusually -- so I apologize for it. I think the air conditioning is beginning to come on. Michael Lappin, and now that Peter has spoken we go back to our very strict twelve minute presentation. Well, maybe we'll give Michael fifteen minutes. Michael Lappin is President and Chief Executive Officer in the Community Preservation Corporation consorting of ninety-four banks with major New York insurance companies. New York State's leading financier of affordable housing (inaudible) representing public and private investment and over 2.6 billion dollars to the building and redeveloping of over eighty-three thousand homes; the very vast majority of those in New York City. Mr. Lappin has been president of CPC since 1980 and CPC is Michael Lappin and Michael Lappin is CPC and I am not sure he would appreciate me saying that. But nonetheless, it seems to be really true that he would not have had an organization as powerful as CPC is without Michael's leadership. I speak from personal experience. My second development project in my own company. (inaudible) made possible only because of Micheal's intervention and gave us a really tremendous capacity to move forward on our own vision of mixed income housing in Northern Westchester.

Born in Buffalo Mike graduated from the States University of New York. He received a Masters Degree in International Relations from the School of International (inaudible) in the American University in Washington. He studied at the Graduate Facility of the New School for Social Research and New York University's Graduate School of Business Administration. Please join me in welcoming Michael Lappin.

MR. LAPPIN

MICHAEL LAPPIN: Thank you very much, Henry. Let me talk -- most of what we do is not in Queens. Principally because Queens has been in relatively good shape at least in a physical condition, but let me talk about some of the problems facing New York City housing and Queens in particular. Focus on three. First, is affordability. Second is the supply of houses and third is the condition of housing. In terms of the supply of housing, the affordability of housing about one quarter of New Yorkers spend more than forty-three percent of their income on rents which is roughly the same in Queens. Those households, the six hundred thousand households in New York who with under fifteen thousand they pay more than sixty percent of their income toward rent. In Queens it is a little less. It is about eighty-five thousand households pay more than fifty percent of their income to rents. To these residents and to many others the cost of unsubsidized new construction simply is out of the question. One of the important aspects of a housing policy for Queens and the rest of the city is preserving what we have and continuing what we have. The housing supply-- the second thing I want to focus on I mentioned, the city is now short about -- depending on what study you look at -- the city is short about two hundred and twenty-five to two hundred and fifty thousand units. There is virtually no vacancy. As any of you who have tried to find housing or your children have tried to find housing Queens is lower vacancy rate than the city as a whole 2.1 percent. If you look at the pace of development over the last decade there has only been twenty thousand new units completed in Queens and at the same time the population of Queens increased by two hundred and twenty thousand. (inaudible).

In terms of the condition of the houses of Queens is relatively newer than the other boroughs yet it is aging. While the city had six percent of housing built before the second World War, Queens is a little bit newer with only thirty-eight percent built. In these older housing is usually the poor lower income housing. Queens has a special problem with its co-ops. More than twenty percent of its housing is in co-ops. (inaudible). While about four hundred thousand units city wide are judged substandard that number in Queens is about fifty thousand units. That's sort of an overall picture of where Queens is in terms of its rental housing and in terms of its housing supply.

Two principal areas I want to talk about which are areas my company has played an important role in the city in. The first one is really a preservation of how to maintain and preserve what we have and extends its life for another generation. We focus on the rehabilitation of existing properties. We want to make sure there needs to be a continuing reinvestment in our older housing. Housing that was built pre-war and post war, with proper investment in its infrastructure, plumbing, wire and heating should be able to last virtually for centuries. This is an important resource not only for the community, but to maintain affordable housing.

The second thing I want to talk about is the importance of the co-ops in Queens. The restructure that we were involved in. Very important legislation which was sponsored by Claire Shulman the Queens Borough president. Very important while doing this we took along the problem of trying to solve a very messy situation a number of Queens co-ops face. First, let me talk about the preservation and new construction as well. Many of these issues as you will see there is a similarity to them. First of all, to do something in this area most preservations talk about rental properties and talk about (inaudible) with limited information and almost invariably need some form of public subsidies. For new construction as Peter just pointed out you are going to need some subsidies to keep it affordable. The important thing with subsidies is they don't become so complicated to obtain as to diminish the value of those subsidies. In order to get them it is such a difficult process. Only the expert who knows how to navigate through the various governmental cheat holes is able to get it and often the cost of attaining it and the overhead of that organization absorbs most of the benefits of that subsidy. We can talk more as we begin to develop that. We need subsidies that are relatively easy to get. A process that doesn't frustrate the potential developers. Not only frustrates the developer, but it severely limits those who can participate in the subsidy programs.

The second thing we have to look at we have to have realistic standards in a number of areas. One is lead paints. A very difficult issue. Older properties many of them do have lead paints. The problem for the city and nationally is strike a balance between what is a sensible standard, mediate and get rid of lead paint because of concerns about health. If you were to get rid of a hundred percent of all the lead in apartments in New York City it would make quite a massive investment. What that really translates into it wouldn't be (inaudible) you'd end up with the worst which is you wouldn't get no redevelopment. At the same time you would still have the health problem. So a constant struggle to find the balance which is to effectively eliminate the health problem and at the same time not be so frustrating to redevelopment effort.

Third, reasonable pricing standard from municipal services. One of the things that has happened over the years and throughout the country as there has been a campaign against progressive income taxes. We found the municipalities that reduce their income tax requirements in favor of looser taxes. So you use a Fire Department you should be charged for that service. In New York City you should pay for the water that you use. (inaudible) when you examine that carefully if that were put in place -- if you pay for the water that you use you would have had an effect where the lower income neighborhoods in the city would have paid twice the cost of water than the higher income neighborhoods. In looking at these kinds of services what it fails to recognize is that the real cost of providing the services, not so much the amount of water that is used, but the cost of the land helping infrastructure. So this is an example of if this were put in the effect of it on redeveloping housing and developing new housing would be placed extraordinary pressure on low and moderate and middle income housing.

Next thing, some investments are considered risky for institution investors in order to support large scale investment in many neighborhoods, particularly lower income neighborhoods there needs to be an enhancement. Fortunately, New York State has two marvelous programs. (inaudible) which provides insurance for institutional investors who invest in the redevelopment and development housing. The last part I just want to make in terms of the overall environment who attract investment is you have to have a reasonable building and safety codes. Very much the same argument as lead paints. (inaudible) you need to have codes that reasonably meet the problem. At the same time they can't eliminate a hundred percent of the problem. I think often times we end up in very difficult situations where we layer all sorts of regulations on something and very little to the overall quality of the overall housing that adds significantly onto the cost. We all have to bear that in terms of higher cost housing, higher rents and so on. So that's the overall environments.

On the specific environment we actually tried to do this business -- when we go into neighborhoods we go to preserve housing. It is not Donald Trump or big developers who own housing. It is often small developers who own properties and often inexperienced. Many of them just arrived in this country. Recent immigrants who decide that owning real estate is a way for their economic trip into the community. They own a building. They run it. The family runs a building and that's pretty much the extent of their knowledge. In order to preserve that housing or maybe build adjacent housing or new housing there is a complex of government subsidies. Range from tax abatement, real estate tax abatement, tax exemption program, low cost loans. In some cases there are tax credits. There is a handful of programs, maybe a dozen programs each administered by separate agencies each with their separate rules. Very complex. So you have the complexity. You have an unexperienced owner and so and so forth. Hard loan for anyone to invest in let alone anyone to create particularly if you are doing renovation which people live in the building. It requires an extraordinary amounts of support not only from the residents of the building, but the community around it. We are talking (inaudible) co-op in Queens is a lot of trouble and just getting the community support, the building support to do the right thing is extraordinarily difficult thing.

What we have tried to do and this is I consider the most important substance in the process -- redevelop existing housing or create new housing. Peter mentioned is streamlining a process. We hit it as an institution, as a funding institution. We said if we just offer money, say we are going to lend you money to rebuild your home or build some new homes and this would require subsidy, it requires, you know, permanent finance, construction financing. We went out there when we started companies or we are going to redevelop all this housing and we have all this money and so we are throwing a party and you know what? Nobody showed up at this party. The reason why nobody showed up at this party was because all the things that this (inaudible) developers complex process and many didn't have a clue about what construction meant. One of the interesting things working with the preservation as opposed to new construction it creates a very interesting thing here. That was people it defined who were the developers. The developers were not the developers who understood all the government programs; but the developers who happened to own properties in neighborhoods that we were focused on. We ended up with a whole bunch of inexperienced people, our experience was and we get to in effect teach them the development process. We taught them the development process by taking all this complexity and making it real simple for them to do it.

So when you come to me we'll give you the construction financing, we are going to give you your permit financing, we got an arrangement with the city. We are going to give you your public subsidy and you don't know what plumbing means? Well, we are going to train you on terms of this is the kind of plumbing you have to do and this is the kind of wiring you have to do and we'll help you with prices. We'll give you two or three contractors and we'll give you a rough idea of what this is going to cost. We used this approach not in Queens because Queens didn't have the problems. It will in a few years. We used this approach in Washington Heights in Northern Manhattan. We used it in the Bronx. We had one of the most significant redevelopments in the country I believe in over seven years in Washington Heights. We restored over nine thousand apartments using this approach working with individuals most of whom had never worked with governmental programs before. We developed a whole crop of developers in the community who became the economic engine for those communities.

Five more minutes. To improve those communities. Okay. The astonishing thing was not only do we have a large volume -- you build nine thousand units in a single neighborhood and this is a neighborhood of seventy-three thousand units we unleashed an army of really twenty-five small developers. Once they figured out how to do this -- the other astonishing thing (inaudible). The interesting thing and this is a whole subject of another conversation is there is a lot, there is not a lot of incentive in running the subsidy programs to actually (inaudible) reverse. Your benefits are based on the amount of cost that you occur.

In any event, that same process we used to rebuild ten thousand vacant properties from the city, we used that same process. Again a lot of new developers in the business. This city not only needs a renewal of housing, it needs a renewal of developers from time to time. The new developers often can do things more cheaply and it can overcome some of the subsidy and affordability. I just want to touch on two more things quickly.

Another real problem we tried to address was the Queens co-op challenge. The problem was co-ops are over financed. That resulted in repairs not being done and at a time when many of these conversions that are less than fifty percent there are very few low percentage of co-ops sold. The result was a total inability to get financing. You couldn't get financing to sell your apartment. You couldn't get financing to buy an apartment. So people who had larger families needed to move on. They found they were stuck. What we did there and there are still some very troubled co-ops out there. Brought in financing (inaudible). We essentially went in, restructured the underlying depth on the properties, made sure that not only did they have financial stability, but also enough funds to fix the maintenance problems in the building. Based on that financial and physical stability we also brought in endless departments of Fanny Mae, and we saw values specifically rise after that occurred. Those of you who, you know, populate the estates of Bayside I believe in the first year after we refinanced (inaudible) by about a third.

One more thing I want to talk about and then I'll sit down. We are now this is by way of illustration -- we have set up a fund to buy properties. Actually tried (inaudible) we tried to buy Fresh Meadows. We were unsuccessful there. We put together a fund to (inaudible) to do a number of things. To buy troubled properties and turn them around. Also, to look at other ways of creating affordable housing. One point I am going to just challenge Peter on is the assumption that all building costs are the same. One of the things we are looking at, we are going to be doing the first (inaudible). It worked in troubled occupied properties. We are also looking at (inaudible) as conversion possibilities from industrial use into housing. A lot of it depends on its location. We are looking at construction costs. We think we can get construction costssome where between eighty-five and a hundred dollars a foot as opposed to double that for Manhattan construction. I think there is a variety of innovative ways. This will not work in large scale development. I think there are many small scale opportunities.

So I am going to sum this up by saying the possibilities -- one, making sure we preserve what we have and in the process, the by product of an effective streamlined process is to create a whole new generation of developers. I believe in our experience that same young generation of developers can be the driving engine to do some of these smaller things. (inaudible) in a ten to twelve unit properties doesn't sound like much, but when you have thirty small developers doing it and they are doing it consistently over time you are going to create an enormous amount of units. That's how Queens and many other boroughs were built in the first place. Thank you very much.

MR. WOLLMAN

WOLLMAN: Eric Kober has been the Director of Housing, Economic and Infrastructure planning in the Department of City Planning since 1986. He has a Masters Degree in Public Affairs from the (inaudible) School of Princeton and the second degree in economics from the Stern School of Business at New York University. Eric's responsibilities include tracking demographic and economic indicators. Particularly of how these trends affect land use and infrastructure needs. He also advises the Planning Director and City Planning Commission on land use, housing, economic development and infrastructure. Please join me in welcoming Eric Kober.

MR. WOLLMAN

ERIC KOBER: Thank you for giving me the opportunity to talk about housing in Queens for the City Planning. When I first became involved with housing issues in the mid eighties when the issue was infield zoning and there are some people who might know what in field zoning is. In my twelve minutes I have here I can't really explain it in details, but the issue at that point for the city then was for sound small homes in low density neighborhoods and they replaced it by doing much bulkier, multi-family buildings. This was going on in many neighborhoods. We began to address this issue and subsequent zoning issues in Queens the beginning of the eighties.

One fact is that Queens is growing. The population of Queens 2.3 billion residents in the 2000 census. This was an increase in enumerated population two hundred and seventy-eight thousand; fourteen percent since 1990. The largest population enumerated and the first time Queens has exceeded the two million mark. In the 1990's followed an enumerated three percent gain of sixty thousand people. The Department of City Planning thinks the gain was more (inaudible) but there is a clear trend and that trend seems to be accelerating over time. Population is growing fast.

The second is that Queens really has the most diversity than any borough. In 2000 Queens was thirty-three percent Non-Hispanic White. In 1975 (inaudible) Spanish and eighty percent native. Peter Magnani mentioned it is probably the most racially and ethnically diverse place on earth certainly in the United States. Also has the largest concentration of persons who refer to themselves as multi-racial. It is likely that Queens has still more (inaudible) residents than any other borough. In 1990 there were seven hundred and seven thousand (inaudible) persons in the borough. Thirty-six percent of the borough's population. That probably is more than forty percent in the 2000 census. As recently as 1970 when the borough was (inaudible) that Queens was seventy-eight percent white Non-Hispanic and (inaudible). So we can see how much population turnover there been in the borough in the past thirty years. A wide range of attractive neighborhoods and a high income (inaudible). Again, the income data for the 2000 census has not been released by the Census Bureau. Per capita income data is based on tax returns. From that data we see per capita in Queens increased five percent from 1998 to 1999. $29,095 dollars which is below the average for New York State which is pulled up by Manhattan and some of the suburban communities. The concerned civic groups, elected officials for the Department of City Planning fifteen years ago (inaudible) the borough needs more housing for expanding population. As Michael Lappin pointed out housing stock has not increased as fast as the population in Queens. The consequences of that are by law of mathematics is average housing size is increasing, overcrowding has increased. (inaudible) the solution, a series of solutions or changes in the way housing was regulated in the New York City Zoning Resolution. That was really a collaboration of many years of mayoral administration, the Department of City Planning, Borough President, City Counsel members and civic groups. This resulted in a series of zoning tax advantages and again, I am not going to talk about the details of the advantage because it would take twelve hours not twelve minutes. (inaudible) lower density tax cut zoning follow up, zoning amendments (inaudible). (inaudible) assure most new housing to be a good neighbor, relate well to existing residential buildings, and to street scape in a way that developments (inaudible) no longer would housing be (inaudible) fine tune the zoning map. We are going to be taking serious the zoning map changes which affect the character of neighborhoods. (inaudible) efforts have succeeded in maintaining high level housing construction in Queens without by and large controversies of the 1980's. Between 1994 and 2000 the borough saw ten thousand (inaudible) units in new housing completed. An average of about fifteen hundred units per year. New construction is widely scattered throughout the borough. (inaudible) the challenge for those of us charged with planning for Queens is to plan a careful balance between the need to produce adequate new housing units and a desire for certain character.

One issue that persists is the future of the 1961 Calvin (inaudible) many people here are familiar with such buildings in Queens. Sometimes fits the business priority. Real estate developers almost never fit into the established context between (inaudible) often leads to public backlash against zoning of any kind of multi-story apartment building including the relatively generally acceptable five to seven story housing which models the six or seven story apartment building. Another issue here is really a national issue which is really a very important thing is sometimes called the (inaudible) issue. It is the increasingly (inaudible) houses, single family, detached home areas. (inaudible). Which was subject of an excellent conference here in the last year. Unfortunately, succeeded in cheating the city wide clinical consensus necessary for enacting (inaudible). Part of the original proposal. (inaudible).

I'd like to close with an (inaudible) to those of you in the audience who design and develop new housing increase. While dealing (inaudible) pursue clinical processes is after ten called upon to respond to more restrictive regulation. (inaudible). Building houses that respect character and that neighbors are happy to live next to as is the case now with most of the housing built in Queens. Not generating a form of controversy, help maintain the city partnership needed to support zoning (inaudible). Thank you.

MR. WOLLMAN

WOLLMAN: Joseph Farber is President of the Queens Chamber of Commerce. He is also a partner in the firm of (inaudible). Mr. Farber serves on the Board of Queens Legal Services Corporation and is Chairman of the Committee on (inaudible) disputes on the Queens County Bar Association. The list goes on. Past and present responsibility included Chairman of the Board of Directors of the (inaudible) Bank on Long Island and North Shore University Hospital, Chairman of the Board of Directors of the Queens Legal Services Corporation. Chairman of the Board of Directors for Queens' Chapter, Member of the Red Cross. Member on the Board of Trustees, the American Red Cross of Greater New York. It goes on and on. I want you to join me in welcoming Joseph.

MR. FARBER

JOSEPH FARBER: Thank you. I promise I won't go on and on and on. Just by a show of hands how many people are here from Queens, work or live in Queens? This is wonderful. This is a continuation of preaching to the choir. It is nice for us to be here in what I call the outer borough. People in other communities grow up and they want to be like we are in Queens. So we all believe that, right, those of us from Queens County? The topic I have is the Chamber of Commerce as a strategic asset. So I think I need to start for those of you who may not be aware of what we do at the Queens Chamber, just to give you a little background.

The Chamber is now celebrating its 90th year of being a strategic asset in Queens County. We are that asset because we have assets because unlike many other organizations we not funded by anybody. We exist solely on the dues of our members. So what makes us a strategic asset? Why have we been able to survive for 90 years helping the business community in Queens County? In my opinion, there are three facts.

One is our members. The second is our program and maybe most importantly is our credibility. Now, in terms of our membership we really don't need to do much more than referring to today's program because your next representatives are of all members of the Queens Chamber of Commerce. I think their accomplishments, their contributions of Queens County as real estate developers speak for what they do and what the Chamber does. We have eleven hundred members. Those members include not just real estate developers of various sizes and magnitude, but also the biggest financial institutions, educational institution, health services organizations. More importantly from our perspective if we are a strategic asset we got to really harvest strategic assets for those one and two person businesses. We got able to find out from our members what they need, what we can do, what programs are important. It is this feedback that we get from our members as well as the accomplishments they produce in our county that make us the strategic asset.

The second point is our programs. The Chamber is a proactive organization and the reason why it work so well as it does again is our members. Our members are part of every one of our programs. Every one of our committees is open or are open to any member. Any member can serve on as many as they want as long as they are willing to take part in our programs. The way we serve a community is we provide building awards. Every year we have a contest. We provide building awards for a wide range of categories in buildings in Queens County. By doing that we get a lot of input into the quality of construction in Queens County. We like to reward buildings that are not just aesthetically pleasing to the eye but fit within the community. We are very conscious about quality of life issues in the county. Although, we are a business organization. But our motto is to promote business in the county. We are always concerned with the quality of life. I think that input that we have with our members who are real estate developers who are in the business, it is an important issue because you heard a lot of statistics from last week and this week. This one statistic that I will throw out is that the value of real estate in Queens at the last count of a hundred and three point eight billion dollars. Interestingly enough, from that figure, seventy four billion dollars is represented by one, two and three family homes. That is only seventy-one percent with the value of real estate. That's an important issue because we talk about Queens being the diverse county that it is, when we talk about a county that brings in the immigrant population that we do, they need to have a place to live. I think home ownership is a vital aspect of what people see as a margins of success when they come integrated into the community of Queens County; any place in particular. We have a terrific governmental relations program that again is an asset to our members. We are, through our legislative committee, able to put our members in touch with all our elected officials. We have legislative breakfasts, legislative dinners that attract all our elected officials at no cost to our members. Rather than have to debate five hundred to a thousand dollars to go to a fund raising event that can (inaudible). What that does is allow on a personal level for them to tell the elected officials what their concerns are, what program they need, what funding, what is working, what is not working. To get direct feedback. It has been our experience that when you meet elected officials, government officials under those circumstances they are far more candid with you in telling you what you can get done and what you can't get done. So our legislative program is another wonderful program. But we also like to look around the county and see what we think as a Chamber might be necessary or needed. That's why we have a Convention Committee. (inaudible) we retain a consulting firm to look and see if there was any interest in building a convention center in Queens County. We are at the point next week where we'll receive the initial report to see whether there is a need for a convention center, how it will impact on the economy of Queens with the existing hotels we already have. But this was an issue that we as a Chamber felt was something that our borough might need to be addressed. We have also tried to help our members with export programs. The first time the Chamber would have a program that will bring your members into the export business. One of the things we can provide for our members is really access to other programs. As I said we are not funded by anybody, but there are a multitude of programs in Queens County that provide fantastic services to the business community at all different levels. If we can bring our members and put them in touch with those different programs then we are really being a strategic asset because the biggest problem that one and two and three parts of businesses have is getting the information. Sometimes they don't even realize what they need. They don't know they may need an extra employee. They don't know what kind of tax incentives are out there. They don't know what kind of programs are available in terms of business development. If we as a business organization can put them in touch they can (inaudible) and we fulfill our role as a strategic asset to the county.

Another thing I think makes us successful over the years is our credibility. Being a non political and (inaudible) but the recent history of the chamber if there has ever been an instance where anybody has ever looked at anything we have done and questioned whether there is a political role in it, I think that gives us a lot of credibility. Then when we speak for our eleven hundred members and don't forget our eleven hundred members employ well over two hundred and fifty thousand people in Queens County. So, it has become a wider and wider -- that we represent. When we speak with that credibility I think our voices are heard. It is not that they always listen to us. But they will pay attention. I think that credibility is something that is very important. So we are all excited. We are an advocate to Queens County. I think that they only need to come into our borough to see what it is. Take a trip to Queens County to see how it works.

We have also been very fortunate to (inaudible) with the relationship with the Borough President's Office. I think we have been blessed and I am not making a political statement but we have been blessed with a very proactive Borough President not just her, but Peter and her entire staff that have always been responsive not just to the Queens Chamber but they are responsive to almost any organization in the county that wants to further the progress of the borough. We are very thankful for that. We are a strategic asset. We see ourselves as a strategic asset. We look to the future. We are concerned with business. We are concerned with development, we are concerned with quality of life in Queens County. Thank you.

MR. WOLLMAN

WOLLMAN: I would like to thank Michael Lappin, Eric Kober and Joseph Farber and ask if the three panelists for the next session of the morning's program would take theirs seats. Thank you. Joshua Muss is president of Muss Development Company representing its third generation. Specializing in the boroughs outside of Manhattan the family has built many thousands of residential units throughout the 20th century. Development has recently completed two communities comprising fifteen hundred thousand (inaudible). Subject of next year's roundtable in June 2002 assuming we all get that far. Retail Center in Forest Hills, Jackson Heights and Staten Island and a 1.5 million square foot mixed use hotel office building in Downtown Brooklyn we which saw something about at last year's roundtable. It is about to commence a fifteen acre residential office and retail center in Downtown Flushing, Queens and the twenty acre regional residential community on the south shore of Staten Island. The fifteen acre mid-rise residential community is under construction on the ocean at Brighton Beach. Please Joan me in welcoming Joshua Muss.

MR. MUSS

JOSHUA MUSS: I am going to start off the topic. I would just like to make a comment. The problem with housing and Henry and I had a little conversation where he wanted me to talk. He wanted me (inaudible) concerns of building large scale housing. My preference (inaudible) within the Flushing context because that's been a very exciting project. Affordable housing has become a (inaudible) for low economic development housing. Middle income housing I would say in the twenty thousand units and I am sure I am not accurate -- that's been built in the last ten years in Queens probably at least twenty-five percent is high income. Probably fifty percent is low or middle income. So twenty-five percent, (inaudible) units of people who are earning let's say a hundred and fifty thousand dollars (inaudible). Unless that market is addressed there will be serious problems. For example when Peter talks about just a small thing as a mortgaging (inaudible) tax you are talking about maybe two or three dollars a square foot which in the boroughs is a lot of money. Where all decisions are made in Manhattan it is a little piece of the pie. These little pieces of pie add up. Ten dollars to twenty dollars a square foot can make a difference of a profit in the borough. In Manhattan where you are getting a thousand dollars a square foot nobody cares. That's the challenge that we have.

Also, by the way (inaudible) for the larger developers that's what is going to make a dent in the housing market. So Peter was right there, too. The costs are the same. Higher because we do infrastructure as well. (inaudible).

Anyway, let's take about flushing. About 1983 I got a call from Hong Kong. A friend of mine was doing business (inaudible) employment so people could get a green card. That started a process for a project that had not yet started. The development I am going to present to you in not a lot of details because I don't have the time, is a classic case of development and what it takes to do in the City of New York. It is a site which is very well located in the middle of an area which is industrious, thriving and which has done so despite the fact (inaudible). Focus on Queens has been on Long Island City. There was a site that of all the development and we started (inaudible) early 80's. I remember being invited to City Planning by Peter Magnani. He gave a discussion as to why Flushing is a place where all development should have it. It's on the highways. It's well located. Lots of development space. Good labor market, great transportation and an hour closer to Manhattan and you can see Manhattan. So that started the process and, of course, in that period of time, everything that happened, happened including economic cycles and the persistent problem of getting development costs in Manhattan (inaudible) and truthfully no matter how good the idea is, no matter how probable a reward is at the end of the day, and no matter how loyal the community and the government support is that is extremely critical.

I'm going to give you a quick review of the development. This slide will be the background. I'm just going to give you a quick chronology. 1983, the fall came in and its concept was to create -- this is a piece of property which is on the corner of College Point Boulevard and Roosevelt Avenue, a block from the heart of Flushing to create into a something. There was about a (inaudible) and fifty thousand square feet of property and the original idea was to just chomp it up into little pieces and between 1983 and 1986 there was a negotiation between Con Edison and the City of New York to transfer Con Edison's work space at the time. We were aware of this property because we had originally moved the office headquarters of Con Edison to a site in Forest Hills and Con Edison was content with the location. They said if you want to develop it, find us an alternative location. The city was very cooperative because they understood this was a potential cornerstone of development for the west side of Flushing. Of course, the Borough President's office was extremely supportive, I believe, at that point in time. We showed them our drawing of what we could see of what to do with Flushing. City Planning we touch base with because it would have to be a development and rezoning. What we expected to happen quickly, first there was a three year period of time where the delay -- it is inherent when dealing with a company like Con Edison -- was matched only by the ability of the city to complete the negotiations necessary to include, which there was. 1987 to 1988 the Con Edison Workout Center was built in the College Point Industrial Park and I think as of that point we could probably say that we were the only building that did not move. In the meantime, we are preparing for the development of this site. Between 1989 and 1991 the recession created a recycle and (inaudible). 1992 to 1993 there was about whereas the waterfront zoning was going to commit this fourteen acre site with a sliver of water on the mighty Flushing River against the Van Wyck Expressway. Again, Borough President and City Planning extremely helpful in understanding the problem and getting us out of it. Because the issue of development is the ability to respond to the cycles which are ever present at that time in fact in 1985 we were expecting to build the continuation of the office space needs for the borough.

1994 to 1995 rethinking what to do. There was no money, not in our pocket, there was no finance ability of any development so we proceed to try to drum up support for a total development and rezoning of Downtown. Again, the local elected officials, the civic associations the borough president's office extremely supportive. I remember being in (inaudible) office. It is Christmas in June. We are going to rezone Flushing. It is going to happen in two years. Two years sounds great, anyway. That was in 1996 and I believe the rezoning was completed in 1999. So between 2000 we came up with schematic number, 287, 358. And now you're looking at -- commercial is no longer a featured attraction because you can't build a commercial building and development in the boroughs at that point. The force was excessive. The potential of income was non existent and there was no market. There was a market in retail. And there certainly was a market in housing. Retail was a no brainer. Retail was what it takes to put in the bottom portion of the properties. In fact, down by the river is elevation zero. Up by College Point Boulevard elevation thirty and this site is as impacted a site as you could ever imagine considering how on one side it is a railroad. On the other side it is a subway. On the other side of College Point Boulevard. On the outside is the river and the Van Wyck Expressway. Below is water and on top are airplanes. So it takes a lot as an interactive type of development to figure it out and we did. We figured it out. We put a base of retail on top of that to have housing. The problem became is that the retail base supports the site in terms of some infrastructure and the owner after twenty years no longer owes money because he can never borrow money against it because it was always environmentally impacted. Then how can you build housing and that's the real big question. Can you build housing on a property that not only costs nothing, but it is supported by the retail and we are still not sure and that's the tragedy of the development of housing in the borough. But we expect to do it. We are going to do it at least once and find out if it makes money. We have done some practice in that so we'll give you a quick look at one thing we are doing now.

Okay. We are looking now at I think it is broken. This is the waterfront in Brighton Beach so that's a site -- that is a classic site, which by the way can not be developed without (inaudible). We approached in 1988. It was a purchase and again a difficult, but finally conceded to redevelopment of what had already been approved some twelve years earlier. We'll reduce the site from four high rise to about fifteen mid rise buildings. That was the concept. This is a better look at the site. This is the site before it was developed at all. This was a rendering of what was meant to be on the site and the idea was to break up into small buildings so that they would be financed. You could not finance a two hundred apartment building in the City of New York. This is as it was actually built. This is one building. Yes, I think it is not cheap to build. It was built with the expectations of trying to create an environment which will generate upper and middle income to luxury housing and I call it' luxury housing because it is the only way people are going to respond to it, but if you want to know what the definition of luxury housing in terms of square foot price, come to me later because it is embarrassing. Yet, it is what you have to do to try to create a reasonable price that would be more expensive than the cost of housing because the cost of houses is more expensive than middle income levels that currently exist in the State of New York.

Besides that we put in a terrific public facility. This is embarrassing, by the way, but when I saw when I was finished I became (inaudible). Until then I was an idiot. This is a little bit you see the boardwalk in the background. This is the view from the top, so to speak. It has been well received. It is, believe it or not, affordable within the context of middle income market rate housing in the City of New York. Same apartment here would go for less than three times that level in Manhattan. So we are proud of what we are able to accomplish in the boroughs of the City of New York. We expect that we'll do something very similar. Once again, this is the context of Flushing and I am going to go back to that in a few minutes.

I am just going to show you a concept of what we expect to do and this is difficult to understand and this is, by the way, schematic number 270. Give you a sense of the scope of the projects and the concept is and since this has been addressed we decided we are going to keep the overall site on a same level of College Point Boulevard. We are going to bring up the level so that it is basically a drive into the site with retail on both sides. The parking which is (inaudible) mostly positioned underground, but it gives you a sense of the base of retail, the ability to do apartments above and this is very schematic and the impact of a development of this type. Talking about total construction of almost (inaudible). This is our current concept and again its schematic going straight in, an extension of Main Street, an extension of Roosevelt Avenue. Not an isolated shopping mall. Not an unfriendly environment. Something which will take advantage of the extraordinary heterogeneousness of Downtown Flushing which has shopping and apartments above and to be a continuation of the site. I'll just leave this over here. Flushing has great -- it has location. It has transportation. It has infrastructure. It has parks an stadiums. Most important it has visibility; a very important factor. People know were it is. Most important, it has a load of land. It is surrounded by hundreds of acres that beg to be developed. The Willards Point certainly is one of the prime examples. The waterfront is a prime example and College Point Industrial Park is a prime example. If development can be done in the boroughs, it better be able to be done in flushing. If it can't be done in flushing than the rest of the boroughs are doomed. Because the neighborhoods where people aren't ashamed to live or the immigrants want to come in and live in decent housing. There is nothing available. If we can't produce it then nobody (inaudible). It is the best chance of New York City's success. We believe that it is and thank you very much.

MR. WOLLMAN

WOLLMAN: Richard Gelman is Chairman of the Board, President and Chief Executive Officer of the (inaudible) Nationals Bank in New York City formerly known as the Flushing National Bank. He is also a President of the (inaudible) Chamber of Commerce and Business Association. Involved as Director of many community organizations such as the Downtown Flushing Railroad Corporation, the Queens Historical Society and the President's Counsel of Flushing. Please join me in welcoming Richard Gelman.

MR. GELMAN

RICHARD GELMAN: Hello. Josh did a heck of a job. Covered anything I could hope to possibly cover. So I won't take much time. But Josh, having you in Flushing, it is a shame some of the thing you said we haven't been able to utilize your talents twenty years earlier. It is so frustrating to do business in real estate sitting here say separate (inaudible). But if you come into Flushing, Josh has -- if you come in and you want to do good, Flushing is waiting for you. We have a community board now and in the past that is the most cooperative at bringing business and residential and anything that is being done. Unfortunately, there have been problems of overgrowth as Josh said. But if anybody looks at the map, some of this is a repeat that I am just going to stress everything surrounding Flushing. The subway ends at Flushing. The buses come in and out of Flushing. Long Island Railroad is there. Shea Stadium, the airports, the highways, Throgs Neck Bridge, the Bronx is two minutes away, the Whitestone Bridge. At one time Flushing was starting to go downhill. And (inaudible) must have looked at a map from above and said where is the best place to go in Queens and in terms of the other parts of Queens is a gem. We just don't have a beach. I don't have a plan for that type of speech. Wellington is more technical. He is an architect and I only got involved on the Flushing thirty-one years. One year they couldn't find anybody to do the job. The President of the Business Association so they gave (inaudible). I am actually co-president. (inaudible). He is really like a co-mayor of Flushing. Probably most of you know her, but I can't stress enough what we have in terms of Community Board working with the staff. The make up -- we have in Flushing Peter stressed that we have a hundred and seventy languages spoken in Queens. We have a hundred and thirty-one languages in Flushing alone. Whatever it is, the diversity really we enjoy in Flushing and we think that what is going on in Flushing can really become a center of tourism. Stop at the airport. Come into Flushing for the great foods, shopping and we have had years of work. It is almost unfair because we have been working years and years and years and Claire, who has been so helpful, her office and for example, the subway is now redone and took us years to redo the streets. The streets are done, the curbs and sidewalk, the light posts. There are things that are already done in Downtown Flushing and you don't have to redo. The municipal parking lot. (inaudible). So it is there for the taking. If we could get the people like Josh in Flushing it would turn out to be a gem. It is now, but as a whole new -- as of economy taking a little bump now, but it is there. The economy is strong and we welcome you into Flushing.

We do have quite a history in Flushing in terms of Flushing was founder of religious us freedom. The Town Hall (inaudible). All have been redone and utilized. Macy's is now is coming into Flushing. Home Depot is coming to Flushing. Yankee Stadium and Giants Stadium is coming into Flushing. (inaudible). I think it speaks for itself and what everybody else has said and we are very excited and will be welcoming you to come in. You won't be sorry. We do need support and we have been getting like Josh says the politicians and the Borough President's office and it is hard to make changes. Many of them have been put into a start years and years ago and many of those who are hoping some day, I don't know if we are ever going to see the Municipal Latin (inaudible) which was a PBC project, but maybe. So, I am going to see and give you some time for Mr. Wellington, because I know we are running a bit late. Thanks very much.

MR. WOLLMAN

WOLLMAN: Thank you. Wellington Chen currently serves as Vice Chairman of the Queens County Safety Board as a member of the Board of Trustees in the City University of New York. Please join me in welcoming Wellington Chen.

MR. CHEN

WELLINGTON CHEN: Good morning, everybody. I just want to give you an overview of what I intend to do with the ten to twelve minutes. Some of the framework of what I would like to do as Mr. Gelman said earlier. Has been in the community thirty-one to almost thirty-two years. As Josh mentioned it has been extremely frustrating in terms of trying to get something done. It is a long hard educational process so to speak. So I would like to graphically supplement what the two gentlemen said this morning earlier. Obviously, the Borough President's office has been very very helpful, City Planning and God forbid I should miss all the other developers. So with that, okay, to show you great minds think alike the same slide without knowing here he was.

To give you an idea of what budget is okay that obviously as Peter Magnani said, Manhattan is receding. Those of you that are fortunate to have visited flushing, some of our projects it has a tremendous commanding view. You have World Trade Center, Empire State Building, TriBoro Bridge, all the way back up Whitestone. So it is a strategic location. To give you and idea what everybody is talking about. This is Main Street here near the bottom there. Flushing River, LaGuardia Airport is here. This is the U.S. Tennis center that everyone is aware of. The number one rated tennis facility. This is where Peter is proposing the new swimming pool, that vicinity, the Queens Botanical Gardens down here. We have the Mets trying to do a new stadium here and this is the fifty-five acres that like the others. (inaudible). So in credit to the City Planning back in the 1970's they rezoned this area, a hundred and twelve acres over here and fifty-five over here and obviously as the first (inaudible) meeting was held here. (inaudible).

Obviously, as you read in today's Times it was mentioned that (inaudible) have two sets of possible locations. There is a hopeful fact that the Gowanus neighborhood is making a comeback. So we also have a three hundred million dollars tank which is trying to clean up Flushing River. So there is no longer a heavy overflow of rainwater that will hopefully clean up the river. To let you know this is the number one Home Depot in the country. It did so well they are building another one seven miles away. Even though they rezoned it, the U-Haul is not for sale because it is also the number one U-Haul in the country.

I will try to follow, the opportunity and the issues. We have a tremendous demographic. I have met with hundreds of people and every retail developer will say to you that in America any time you have fifty thousand people there (inaudible). Here we have that number going to the subway every day. So we are also the most diversified county in the United States. It is the face of the new world. Very quickly some of the issues and I'll get into that. Just remember this. This is the last premium rezoning from here to Nassau County and all the way to 59th Street Bridge. This is a famous map. I just want to use this so that you will know. (inaudible) is sitting in the audience. This is her Flushing Town Hall. She's getting a trolley. Part of the reason I mention all those is because I've been accused of trying to buy all this land. I just want you to let you know that TDC, total develop concept. We thought as a policy there ought to be some sort of coordination between where the traffics are coming from. Where the open spaces are, where the children are crossing the streets. There ought to be some sort of somebody looking at this in a coherent way. So this is a map. You can see how pathethic we are. This is Main Street Flushing area. Josh Muss is here. This is the Flushing River. Shea Stadium is here. Manhattan is this way. This is a map trying to highlight all the choices we have. So you can see by the dots this is the Sheraton Hotel doing very well. Ninety-three percent occupancy. This is a gasoline station, and a bank and post office. That's it. Queens is strategic.

I just want to hit on a couple of points. Forty percent of the people work in Manhattan. Just remember this diagram. Because we are two miles away from LaGuardia and six or seven miles away from Kennedy. Going to New England, going to Hartford Connecticut, going to Boston, everywhere you must pass, coming out from Long Island you must pass us. We are two major raillines to Long Island City. Again, the heart of Queens (inaudible) everybody knows Flushing. Part of the reason why immigrants settle in Flushing they were not sophisticated enough to look at a map. They heard about, they said this is not a bad deal. I always said in the other years and I would say to you starting, you know, you like that thing? It is the heart of -- because I was looking for years at this map helping City Planning helping downtown Flushing Development Corporation and, you know, all those people I remember well in the seventies trying to do it. The first true master plan for Downtown Flushing was back in the 1950's. (inaudible) Richard Gelman is the one who alerted me. He did the first master plan for Downtown Flushing. Went nowhere. 1961 this was rezoned as a major, major retail area. C-42. To give you the comparison. The nearest rate, C-41 drops that down to (inaudible). This is the only 4.8 (inaudible). Queens being a bedroom community. So in 1961 there was also C-42 and very quickly they found a problem. In 1970 we went into (inaudible) and that's when the Downtown Flushing Development Corporation (inaudible) was the former community board. I was in my last year of architecture school, and he said we need help and I jumped in and little did I know I'd have spent all this time. But 1079, actually '76 Peter (inaudible) came up with the Downtown Revitalizing Plan. Went nowhere. (inaudible) also '79 Larry (inaudible) in here and wanted to do a huge mall here. '85 (inaudible). In 1993 finally the rezoning got changed. Not changed. In 1998 it finally passed. So it shows you the time and efforts that went into it and the way of going nowhere, the frustration and that's why I refuse to give up. I am so glad Richard Gelman Josh -- because I believe that and this is not just me.

If you go back and look at Flushing today it is pretty much the same. Nothing has been built. The last major retail store was done by Josh. Done in 1973 or '74. So that gives you an idea. But it is more important because you have a true established downtown with identity, with I don't know if you saw the PBS special two nights ago. It was talking about Virginia tried to fight off K-Mart -- Wal-Mart. I am sorry. So somebody did see it. Wall Street Journal a few days ago how in Colorado is sucking away all the high tech skilled employees up to Colorado because of the lifestyle. They have the right to choose where they want to work and where they choose to live. I'll give you that later again. Long island railroad, you get on the train, it's sixteen minutes to Penn Station. We are the hub. We carry in addition, we have 88,000 riders a day. We have a tremendous population. This is a very important graph. This is for all the city planners that are looking at Long Island City. I agree wholeheartedly with those two gentlemen. I think the emphasis is misplaced in Long Island City. This is a shot done by the New York Public Interest Group. This is where the center of gravity is. We have the yellow is the white population. Blue is the Asian and green is Hispanic. We don't have the red yet but the gray is the black population. So you can see the density. The density is here. This is an existing large population. I hate to say this but I remember in 1975, 1976 when we were doing this thing New York Magazine was running on the front cover: The next hot neighborhood, Long Island City. Here it is a quarter of a century later. The reason I say that is not just Wellington saying so, I want you to know that this man used to (inaudible) the studies. Go on the internet surf his studies. Michael Porter is a renowned productivity expert. Michael Porter was asked to do a study of the inner city of Roxbury in Boston. He said how can I turn the city around? To his amazement he found that inner cities have three distinct characteristics which, why mention it? Matches Flushing perfectly. Strategic location. Tremendous market, and it also has under-employed work force. This is his finding. The rest of America may be over retailed of, you know, twenty-one, thirty-one, square foot per person of retail space. In Queens we are down to four square foot per person. The industry marketplace is at eighty-five to a hundred billion dollar industry. We have a spending power of market and economy of (inaudible). Because of the inner city they actually have more buying power than they do in the suburbs.

This is Queens Center Mall. (inaudible). That's more than twice of Short Hills. And you know what type of mall is Short Hills. This mall currently has no water fountain. This is a 1989 study that shows how much money, within this short radius we are of a billion dollars and in (inaudible). Roosevelt Field in twenty years time for a little mall, forty-seven (inaudible) stores. When you offer consumers choices they flock to it. You look at Las Vegas; the fastest growing city. You look at -- you need critical mass. You need choices. For twenty, thirty years we have been told by different interest groups in downtown Flushing that you could not want choices. You would rather have no choices. That's what offends me. (inaudible). Old Navy see is coming in. We have got some problem to deal with. This is, by the way, if you do a census check of the 2000 we are one of the most evenly divided balanced communities. No one ethnic group dominates over one another. It is a balance. This way you share. Central business districts has no office. How do you put people to work if there is no office space?

So the buzz words are in urban planning (inaudible). And I'll explain what they are. I don't have to tell you, transit oriented development, grounds theory development. Public planning. Very simple. We are the number one station outside Manhattan. Outside of Manhattan we are the number one station. We carry 15.6 million riders a year. We are higher than 59th Street and Lexington where Bloomingdale's is. We are higher than Chambers Street, and World Trade Center. We have more riders. Don't forget our eighty-eight thousand that comes by us every day. So you need to create a new central business district; closer to work, closer to shop. Adam Friedman was right last week. Talking about mixed use districts. You have to decide what you want for downtown. You want incubators? You want business districts or what do you do? You want more open space? These are all topics to discuss and not down by one. (inaudible).

You know, we have to take a look at this traffic issue. This two weeks ago, may twenty-something. I picked it up because I thought this is relevant and it is. We generate poor air quality. We have high asthma rate, traffic congestion. So this is what it is about. You want to improve stores that are not built far from your residential area. Queens is a large residential area. Hop in their car to walk around the corner to get a quart of milk. Back to the basics. You know it is nothing new. It is a 19th century idea of human scale being able to walk to your shopping distances. Allocating more space for parks. Give nice quality of life. So this is it what it is about. (inaudible). Downtowns are not toilet papers. You don't use and discard you know. The center of gravity is good. Again, it is not my saying. The center of gravity is shifting east. Because what Michael Lappin and all these gentlemen are talking about this morning have been affordable housing. Stonybrook, SUNY at Stonybrook is confirming that the trends are moving eastward. The population is shifting. This is what we are talking about. This is -- we have a very small artery, Union Street. This is where C-43 and these are the M zones that have been rezoned. So this is the rezoned area. I must say the 1970 zoning expert was correct. This is the year we are going to work (inaudible). On the other side Shea Stadium down here. This building has been sitting here ten years vacant. We are going to demolish it again. (inaudible). Parking is one of the issues we are going to deal with because you know it takes three hundred and and fifty square feet to build an underground -- to build parking space. If it is underground. It is even more (inaudible). And you get three hundred square feet of space above ground. (inaudible). Town Hall is sitting there available. This is a new project I just opened up in West Palm Beach. It is called City Place. I use it as an example. This is done by Palladium. We were at the conventions, the shopping center conventions they were offering to help us. They said there are federal grants and there are things that you should do, but you know nobody (inaudible). The two prior owners of this property went bankrupt. So that you know that redevelopment projects that I just showed you that we bought from the three prior owners went down with it. They all went bankrupt. We are number four. You can see why the principals are very nervous.

Just to conclude very quickly. There are two examples I want to show you. There is it City Place. These are catalysts. (inaudible) plaque back on the wall of the building to commemmorate what he did for them. Because I think the city was short five million dollars to do this project. Now because of Horton Plaza because of Horton Plaza you now have hundreds of new projects and new convention centers. This is where hookers used to hang out. This is where sailors used to come home. In the old days you are afraid to walk one block the people would jump you on the back. It triggered a revitalization of downtown. They got the city involved and they built this, you know in '84. I thought it was so interesting. The same thing as Rockafellar Center. One of the great models; built during the Great Depression with what? Public involvement.

So I would like to conclude by saying this. We need a special district in Downtown Flushing. We need to have an active local development and see what we want to do with it now. Thank you very much.

MR. WOLLMAN

WOLLMAN: Thank you. You see the pattern of what we have been doing. We were looking at last week at Long Island City, Hunters Point. Moving east into Flushing. Different style different neighborhoods. Following the break we are going to move into Jamaica and South Jamaica for again a different scale of issues and a different type of development. Before taking our break I would like to give Josh Muss one more minute to make one more point. Then please join us for a ten minute coffee break and we'll get you back here very, very quickly.

MR. MUSS

JOSHUA MUSS. Please forgive me. One thing I forget and one thing I have to add. We had a conversation I would say about a month ago with one of the major tenants that is in a building of ours in Flushing which I can't take credit for construction but I can take credit for reconstruction. Warner Amex has approximately a hundred thousand square feet of space in this building which is on Main Street. They reaffirmed not only the fact that they loved the building and the landlord, of course, but they are so much in love with Flushing and the environment and the labor pool that they want to create a longer term relationship. So that Flushing is now the second thing. Flushign is not something that needs saving. Flushing is something that needs expansion. The fact is and this is something I bridled at because Flushing is a much better destination for the labor pool which governs and runs the office buildings in Long Island City. I am on a subway. I keep going right into Manhattan because it is much sexier on Madison Avenue. I have that hour lunch break and I could go wherever I want and make more money and Long Island City you are going to wander aimlessly to find something of interest. Flushing has been ignored to that extent and when the Schumer Commission Report comes out it is going to be ignored again. That's where they should focus. The Willards Point Report of about ten years ago suggested quite aptly that they should reduce the parking requirements so that it is not one in three hundred. It should be one in four thousand square feet because they are going to come by rapid transportation, anyway. You don't want to encourage people and that's one of the places that has an that's one of the issues that has been ignored.

The second thing I must say Wellington, hang in there. It is going to happen. I hate to say this but twenty years is below average for Josh Muss and I've never left a project yet and it is going to happen. Thank you very much.

MR. WOLLMAN

WOLLMAN: Next week for those of you who will be back here for the third session which is very crowded and very heavily subscribed I think there is a great deal of interest in the issues of new construction on major scale. Although Josh today began to talk about that as well, but it is really some of the focus for day three. We refrain from asking that cells be turned off. Next week it will give me a bit of pleasure to describe the programs that the Institute, the public programs that the Institute will sponsor next year. I just want to say one small thing about it for those of you who won't be here next week. The theme of next year is going to continue the issue of growth in the city and the meaning of growth to the future of the city, the issues related to growth. We started off with two conferences. One on the unified bulk and the new zoning proposal of the City Planning Commission and Department of City Planning. Then we followed that with a conference on Midtown-West, the area of Manhattan between 8th and 12th Avenues, 59th and 30th Street. Those are all subsets of the general issue of growth, the future of growth in the city and what needs to be done to sustain it. Are there limits to growth in the city? It is in general the issue that we attack of many different perspectives in the sequence of both conferences and seminars the Institute will sponsor in the academic year beginning in September. I am sure you are all on our mailing list now. If you haven't been we have captured you so you will be getting all that material.

We are now moving onto a different type of set of neighborhoods. Jamaica and South Jamaica. Beginning with South Jamaica, what I call as South Jamaica. I hope Edwin agrees that's an acceptable term. Edwin Reed is the Chief Financial Officer of Allen A.M.E. Housing Corporation in Jamaica Queens. The Allen Organization rehabilitates and builds affordable housing, develops and manages commercial stores, operates a Community Service Center and provides quality education for up to five hundred students from pre-kindergarten to 8th grade. In 1987 Mr. Reed became Chief of Staff for the Reverand Congressman Floyd H. Blake, Pastor of Allen A.M.E. Church. He previously managed a liquid asset portfolio for General Motors and also directed foreign currency positions. Mr. Reed serves on the Board of Trustees of Hofstra University, is Chairman of the Jamaica Business Resource Center and serves on the Chase Bank Community Advisory Board of the Federal Home Loan Bank of New York, Affordable Housing Advisory Counsel. Please join me in welcoming Edwin Reed. I also invite the remaining panelists to join us up here. Thank you.

MR. REED

EDWIN REED: First of all, I would like to say good morning to every one and Henry Wollman particularly for all the wonderful work he has been doing. (inaudible) I think that one of the things that makes all of this very special is for the ability for people to build on the concept are part of community development because none of us does this alone. We do this in conjunction with others and we do it in a way such that everybody has an opportunity to grow. In that regard, it is particularly interesting for me to be here with Greater Jamaica Development because we have really two different kinds of opportunities we would like to take advantage of, but at the same time what we do compliments each other. What makes Manhattan? What makes Atlanta? What makes cities really work is the ability to have a structure that gloss beyond one community but instead can mix several communities together so you have a critical mass.

With that introduction we are going to talk about the things that are going on and the important aspects of development as we now see them. Can you see without the pointer? Where are my technical people here? Okay. Very good. First of all, we are going to talk a bit about the Merrick Boulevard development area, Merrick Boulevard and we'll see a couple of maps on this, is the area of Queens Liberty Boulevard and 116th Street. We'll take a look at many of the institutions and development that have appeared and also the things we are planning for the future. The issue for us primarily, the physical development options. We spent a lot of time on community needs and economic viability.

On community needs, the issue for us is that unlike -- well, not unlike, we develop not only properties but we develop people. All about talking to engage people in doing something good for the community. When we build the senior citizens center, when we build a school, when we build the community, the Business Development Center. What we are trying to do is give people an opportunity to get goods and services in their neighborhoods, but also (inaudible) institution we are also trying to be alive through that process so that when we look at community needs we are looking at it from the beginning of what they need in terms of building a structure and also what they need in terms of programs, support so they can take advantage of their innate ability that were provided to them.

This is the study area we are looking at. The chart is designed to at least give you some sense of where we are and what we are doing. This is the southern portion down here. These are the two parks that blanket the area. We have got a lot of green space out in Queens and we are very happy about that. It is important to know that this juncture that when we did the study it is comprehensive in terms of we also looked at what it would take to improve the green area. We want this in the end to be a walking boulevard. Something people will not look at in terms of traffic congestion but have an opportunity to stroll up and down and make a difference in terms of their shopping requirements. Our big advantage in addition to the park the old church is right there. The school is right at that corner. We own most of that block which is our commercial redevelopment. Down over here is going to be a senior citizen's and that also says we at Allen specialize in having a campus and as planning developers that is a concept that people should at least consider. We don't look at Allen as an individual building, but as a campus. We tend to size everything correctly for what we are doing. Some programs we are (inaudible) because they need two thousand seats. If you have a hundred and fifty seats you may be in an auditorium, but if you have four hundred seats and you need to do something you can be at the old church. Then coming up the new Cathedral is right here and we own most of this block and our development is going to be here and it goes all the way down. We are going to talk a little bit about that space, but this is all Merrick Boulevard coming up and this is Liberty down here to the very north.

In order to do this study we looked at dividing the area into various sites. We have various sites that are developable in this area. They go from site one through eight. Then what we do was a lot of work in recognizing exactly what was there. In order to be effective as a developer in our opinion, you have to understand the preexisting conditions. You want to know who owned sites. What are they doing with them? How long have they been there? When did they turn over last? Absentee landlord? What are the commercial needs that you now have and quite frankly looking at the commercial side of the arena was very easy. There is commercial development in the area. We look at that more as an opportunity as opposed to a problem. The previous speaker I think that was Mr. Chen, mentioned that as he looked at in whole concept of urban redevelopment that he has studied and looked at some of the work done by Michael Porter. My enjoyment is Michael was my professor. So, I have been there, done that.

The other big issue is going to be zoning. When you look at zoning, the zoning in South Jamaica was designed for South Jamaica for the 1930's, 1920's. What we see happening now is that because of the cult of acquisition it is important to improve the zoning we are now basically our four zones which allows for two story structures. At this stage of development you can't do that in an economic viable way. Very quickly this is, it going to tell you a little about the area in terms of the different components of it. We do have a major MTA bus terminal which is going to be right in this area. We are looking at a lot of automotive shops here, big apartment buildings here and then you start going up and you start getting into religious institutions as well as some commercial. We do have a small grocery which is a neighborhood grocery. There is some ability to do well with the neighborhood change. It is important to know for those who are not from Queens that all the way down on the southern end we just did a new Pathmark store. That new Pathmark store is the normal large store that you see in the suburbs. But what happened and this is important for development. That development has forced all our neighborhood stores to improve. Life is about competition. Even in community redevelopments. Competition works because everybody improves in the goods and services that they offer. That's how we look and frame all the issues we look at.

This is the middle section again that goes to the church and dark spots begin to start to show where we are going to do some major development. That is a (inaudible) center and we are going to talk about that also. The last one is down on the lower end of the corridor. I kept this one primarily because there is not that great of an opportunity for development. We do have an opportunity with a church that owns this section right in here but the issue is always parking. For planners and urban communities particularly New York City, the issue of parking is something we all must come to grips with. We must be as creative and innovative on parking as possible because unlike many parts of New York, Queens is a driving community. You have to recognize that a lot of people do drive in and out.

Community characters. We do have the school. We have a new groundbreaking for new schools in Southern Queens. We have a health care center. We have a fire station and then we have about six or seven different churches that are part of our study area. Transportation, Allen has for transportation we own the hub. Merrick Boulevard is the corridor for north south transit in Southeast Queens. Every bus line when people come by to see us you get off the E train and any bus you take will take you down to South Jamaica or at least some portion of it. So transportation in terms of buses is very good. Transportation, when we change and move to a one fair zone, major strategic changes for us. That's very important. We are going to be looking for other new innovations along those lines. As I mentioned, we have all these institutions that are part of the study area. I call special attention -- lot of churches. Lots of them. Seventh Day Adventist has their usual conference there. St. Benedict's and so therefore, being able to develop and work with the community institutions and one of the greatest ones in our neighborhood is the church is an important part of the strategic alliance's that make a difference. So as planners I hope people will start this whole effort of reaching out to churches because they have three things that are very important.

One they have ownership in the community which is where Allen got its (inaudible). Two, they have a great deal of community powers. The leaders of churches and pastors of churches are leaders and can make a difference. Third of all they have a lot of people that provide capital. People power to make a difference in terms of how we do development. We found that at Allen we have so many people that can make so many contributions that it makes a big difference to us in what we can do.

Just quickly that shows the chart of all the buses that come up and down. Let's get to the Allen properties. What we have in terms of the northern region is primarily the (inaudible) and then we are going to at this side, we are going to see the building of the new senior citizen's that we have started. An important part of development is recognizing some of the things owned by the city because the city must be a partner in all of this. I am glad to know that for this region the city has been active in helping us to obtain various properties. There are about three city properties in here that they helped us obtain in order to do development and there is a city property down here that we are doing the new senior citizen construction.

So that the problem with South Jamaica is there is still not very much city properties. We have now collected almost all the city properties that one can have and again, we have to do all of this and do it well. The most critical thing we have done in addition to acquiring properties is to build (inaudible). Wave Tony, you might get some business out of this. (inaudible) which is doing all of the green field sites because we know this in order to do effective commercial development we have got to make a difference so that people feel comfortable. The consulting group is doing a lot of the strategic planning and then the Steven L. Newman Institute is helping with his study. I want to just stop on this one for just a moment. For community development group the partnership with someone who has a technical and computer expertise to generate the kind of analysis you need to be effective is critical. So that you want to get all those partners as part of this process. Then the last two that are listed on the chart, Fanny Mae (inaudible) the Empire State Development Corporation paid for the study. Then there are a host of people this are part of that. The Borough President Claire Shulman who is a driver in almost every project in Queens. The important thing about development from her standpoint is that she has the ability and staff make that work for various components and do all of Queens at the same time. Is very effective in all of this.

Okay. Private partnership this is we are doing a lot of things in order to get everyone involved in that process. I want to get to the picture of all the new stuff. I mentioned that zoning right now is historical and that has also prevented us from having all the development we would like to have. The other big thing we encountered is this whole issue of acquisition cost. Now that properties have exploded in terms of price it is important to designing with the building for the future because you got to have the right density in order to make it an economically viable project. Then we are looking at this differently in terms of what we need for houses. We are particularly interested in what we call middle income housing. Our historical focus has been on affordable housing, not quite low income, but senior affordable. Now we need middle income housing. We need to have a variety in our community. We got to make sure that we got housing for everybody so that we could build a community that works. There is a commercial need. With zoning in order to do this well we need to make sure and this is a concept of RA Zoning as you can see very bulky, very tall. What we are looking for in terms of zoning is higher zoning but with restrictions so that we can maintain community character. I know that the city has done a major redevelopment of its zoning strategy and it was primarily focused on Manhattan which is fine, but we need that same kind of focus out on Queens so we could also do the same kind of aggressive development.

Challenges, how to get the money for acquisition costs. We have done very well with people helping us. Brooklyn Union Gas. They've helped finance some of our properties. We have had some support from developers. We have had some support from banks giving low interest loans. But acquisition costs, one of the things that makes us very effective is we are willing to put in our own money. Allen has a nine million dollar a year budget at the church. We reinvest. Because when we build a 25 million dollar cathedral there is nothing better than putting money back into the vacant stores and back into the commercial properties so we can make a difference in terms of what happens. Owning the property. The (inaudible) is low density. It reflects commercial on the bottom and residential on the top. We would like to go up to at least a picture of the future which you will see in just a moment. Then the other big challenge is as important when you are coming into a historical community like ours that you work very hard to coordinate community concerns. We see working with the community as a challenge only to the extent only because we want to make sure people understand that if you don't work hard in working with the community then you have a real problem doing development. So that we tend to turn this as opposed to a challenge, we turn it into an opportunities. We talked to people. We understand what they need. What we have found in our community for Community Board 12 is that they have excellent ideas and if you respond, listen and talk to them as a partnership you can make a big deal.

Capital is key. There is in order to do these kinds of development you do have to have private public partnership and raise their capital in a manner that allows the project to be economically viable. Opportunity, the real objective of our entire study is to develop a paradigm for developing things, historically underserved communities. Let me just say what we are looking at here is Southeast Queens has one of the highest per capita income in Queens. It is higher than most of the neighboring non-black communities. It is higher than many parts of Long Island, but yet there is no development. What could possibly be a problem with that? How could that appear? It appears not based on economics, but on something other than economics. What we said and it goes back to Michael Porter and what I said before is our paradigm for development is we invest now and then when you come and recognize opportunity we are there waiting for you to join us in how to shape our community. South Jamaica is not going to be a community where developers come in and make all the decisions. We are sitting there to be a part of that process. We leverage partnerships and we want to be market driven. Community development only works when the market works with it.

In conclusion the things that you are looking at and what makes all this real for us is what we are doing. We have already broken ground on the senior citizen's center. We have on the drawing board a multipurpose center located next to the cathedral and we have a residential prototype for redeveloping Merrick Boulevard and they look like this. This is the senior citizen's we broke ground on it a week ago. We at Allen believe in action. We are not planners. Someone asked me when we are doing the study, "Well what are you going to do with the study?" I said, "What do you mean?" He said, "Well who are you going to give it to?" I said, "My contractor." I don't understand that. I don't do studies for study purposes. I do studies to feel something.

This is the new market service center we are developing at this very moment. This is right behind the Cathedral. This picture is interesting because it reflects urban challenges. I have one small yellow house in between the cathedral and the property that I own. She is ninety years old and she doesn't want to leave. She won't even talk to (inaudible). But ya'll pray for me. This is the last one. This is the new look for Merrick Boulevard. We have those eight sites an our objective is to turn those eight sites into something that looks like this. Commercial on the bottom. At least three stories of residential on top. Middle income market and at that point in time we'll then be able to take advantage of all the economic viability that is a part of Southeast Queens and I must say one of the things that makes this work in case there are any developers out there who would like to help with this, is that right across from here is all Alvin Ailey Cathedral. We see six thousand people on a Sunday and all of them come right out and start shopping. Thank you very much.

MR. WOLLMAN

WOLLMAN: I want to say two short things before introducing Carlisle. First, that the Institute was extremely proud and pleased that in inaugurating its own applied planning and research division that this was the first real project we are able to work on here. Edwin and with the Reverand Floyd Blake. Whatever (inaudible) the Institute happens to be me in this case, it is not true. The Institute is a whole bunch of people and some of you know Ellen Posner's name as the conference coordinator here. There was a young student at Baruch who was absolutely critical in working out many of the performers on the project that Edwin has just shown you. I don't know if Colleen Rankford is in the audience today, but she was really part of it and if there are other community organizations that are interested in this type of relationship with the Institute and with the urban consortium of the City University of New York which is our partner in many of the research and analysis plans that we hope to generate the various communities in the city. Please call me at the Institute. We would love to talk to you about it.

For the past twenty-eight years Carlisle has served as the Chief Executive Officer of Greater Jamaica Development Corporation; a non profit organization that has been in the forefront of human redevelopment helping to orchestrate revitalization of the central business district in Jamaica, Queens. From 1969 through 1971 Mr. Towery was Chief Urban Designer for the Regional Plan Association helping to prepare planning and development analysis for New York's Lower Hudson Valley and for Jamaica Center. He was a member of are RPA's design team and (inaudible) urban design Manhattan; a pioneering effort. The key element in RPA's proposal to revitalize Jamaica Center was the formation of a non profit organization of local business and community leaders that would work with government officials to execute specific projects that halt economic decline and position Jamaica for growth. A group of local leaders form the Greater Jamaica Development Corporation and engage Carlisle as the organization's first Executive Director subsequently appointed as president. Please join me in welcoming Carlisle Towery.

MR. WOLLMAN

CARLISE TOWERY: Thank you very much. I am very pleased to have this opportunity. I will be brief. I don't have any graphics and believe partly in the interest of time we are running a little bit behind and partly because I am jet lagging. I am hoping you will be patient with me. I've been flying for thirty-three hours. South Africa. I think I know where I am. I know the subject well, so if I make a few mistakes or bumble around I hope you'll be patient. I am pleased to be here with Edwin because I think Allen, Floyd and that Allen team are by far the best community developers that I've ever worked with. I think their record is just tremendous in the entrepreneurial (inaudible) is evident from the program you seen and the fact that they are taking a whole corridor in South Jamaica and dedicating efforts to it, I think are just terrific. They really are community developers. They are different than we are. We are very much commentary and supportive of each other because we do plans for others. We don't do them just for ourselves. If fact our mission is we fill gaps. We can do what others will not do so if we can create a site with the help of government as we all must have and Mr. Mattone can develop that site then we have been party to setting the preconditions for developers. So we spend a good deal of time in planning and pre-development activities.

I won't give you a history lesson about the origin and purpose of Greater Jamaica but we are private. We were formed in 1967 in a time of distress in the city when both the public and private sectors I think thought there might be a better way. In fact, at that time public like private partnership was a cliche. Nobody quite knew what that meant. We were definitely pioneers in that concept. The objective all along in Jamaica from our perspective has been the RPA a mantra really, that regional centers outside or subcenters outside Manhattan really are rational and they help make the region work better and they have a lot of public purposes associated with them. So our mission for all these years and it has adjusted from time to time as we were opportunistic or as targets changed, has been to develop Downtown Jamaica this older downtown spot one square mile of turf from hillside to Liberty, Merrick to the Van Wyck. To redevelop that area into a center that serves a region.

So we have spent a lot of time on public investment and the infrastructural projects that position Downtown Jamaica for growth. Hopefully those public investments are now coming out of their impact and we have some new markets in Jamaica that I would like to talk about just a little bit. Jamaica as I said, is one square mile, about six hundred thousand people reside within what we would call not primary training area that's about three hundred thousand people but we can see a credible description of a primary market area of Jamaica for about six hundred thousand people. Of course there are, thanks to leadership of our Borough President, Jamaica is in some ways a county seat for all of Queens County which has two million people. We have the courts now consolidated (inaudible) judicial activity in three buildings. One under construction, one recently constructed and another being renovated so Jamaica does serve all of Queens. The Queens Library is headquartered there from which sixty-two branches are administered. We have two hospitals. So we are a bit of a county you can see the criminal activities just (inaudible) near Borough Hall and Borough Hall is there, but we can logically argue that we serve all of Queens. We have two reasonably new federal headquarter facilities, new buildings located in the downtown that serve multi-states, the Social Security Administration for the northeast region. Region two, I think it is called in the federal language serves about seven states and just last year we opened up a new laboratory for the U.S. Food and Drug Administration which also has in federal terms has regional significance. It is the largest lab in the country. Largest FDA lab in the country outside of Washington. It is the most state of the art and we think it has economic implications for Jamaica. The growth potential that is clearly there.

But to second what Edwin has said there is no hot market knocking on our door begging to -- we have vacant office space there still. We have a very strong retail sector. Jamaica Avenue has no vacancies and rents are high and vacancies only as I said in the second level there are some vacancies but we are not yet competing with the real market in some ways; commercial market. But we think with these public investments, these infrastructures that are being made now, we really believe there are market potential. I want to acknowledge that we started with a partnership with John Lindsey whose team, and several of them are here including Stan Mapkins who headed the office that Lindsey put out there called Jamaica Planning Development. We had an one two punch then. We had mayor power on the scene, Stan was in effect (inaudible) of Jamaica and we were the private sector marketing and we are were technically qualified, but we really were not doing the kind of things we do now after that city agency was pulled back. Our Borough President Claire Shulman has been a wonderful leader. Almost every project she has lead and or supported and we are very pleased with all the public investments that have been concentrated in that square mile. I do want to say that most of them have not been city dollars and my argument with the city when we renew our commercial revitalization contract every year is that we have been able to attract state and federal dollars, capital dollars and the city's -- of all the hundreds of millions that have gone into Jamaica for our new subways, for York College, the two reports and other things there, the city has put up about less than a fifth of the twenty percent of those capital dollars whereas the state has put up about, I believe forty percent and the federal government the balance. The subway which costs four hundred and forty million dollars when it was finished in 1989 was eighty-five percent federal money. So some of these big projects it is obviously why the city is just participating in it.

So we think with the city's support for our operations and I should tell you we spend about five million dollars a year and we have about thirty people on our staff. We earn about sixty percent from projects we developed over the years. We have three city contracts. One for commercial revitalization; that's federal money. One for industrial retention and one for ad administering from the state the empire zone. So we do have about fifteen percent or twelve percent of our budget from government and then we beg for the rest as non profits do. But we are reasonably self-sufficient. But it is not ideal. Ideal is split of sources would be a third, a third, a third, but it never works out that way. But currently in last year's budget it was about as I said. Let me mention that the anchor projects that have been made in Jamaica today include the subway that enable the removal of the Jamaica L, York College a fifty acre campus that is now well along as about six thousand students now I believe. The last time I looked at the profile of a York student was a 29 year old African American woman with one dependent, presumably a child. It takes five to six years to get her degree. It is a junior college. It is doing a great job and it has great potential to grow.

We think one of another investment is the FDA Lab which is on York's campus has all kinds of synergy potentials for it because York has a strong health sciences program and the FDA is eager to get some things done working with the university communities including training scientists. A lot of food imported into the United States these days is from developing countries where the standard in inspection and food safety are really questionable. The FDA would love it if the scientists in Egypt who need grants for instrumentation, but more importantly need to understand how to inspect the food before we ship it here and have it rejected.

The courts that I mentioned wonderful new buildings and we are very pleased to have them. Another family court will open up. I believe Peter enlightened this year. A very nice building. The most exciting latest project. We have two of them. Mr. Mattone will tell you about his. The one we have worked on and with elected officials in southeast Queens in the city and state is air train which is now well along. It will connect Downtown Jamaica to Kennedy Airport. It is a major project. The system itself is major. You have seen it I am sure if you have been out there. But the station complex at Jamaica will also be significant and we think it gives Jamaica potential not just to be a major transfer point. That's our mantra that we are pleased to have these regional investments in transportation so people can get through Jamaica more quickly and easily and etcetera.

But what we want to make out of this new accessibility and this new investment is Jamaica has a destination point. We believe that it creates some new markets. In fact we are doing work on a hotel. We really believe now that market rate housing is a potential in Downtown Jamaica and we are working on that as well. I want to wave at you the second wind we now have. This is a plan that we just finished with federal DOT money and Port Authority local twenty percent we engaged Mark Strasser. I think he is here. There he is in the back. We call it vision for Jamaica Center, a planning framework for the development of transportation. We didn't call it a plan because we are not official planners. It sounded a little arrogant for us to prepare a plan but as I said we do fill gaps. We try to do what others are not doing or can't do or don't want to do and this in our view with a community advisory group we spent two years or so producing new framework for development. In some ways the key to it is air train. We think that's our niche. I won't bore you with the details that my jet lagging brain won't come up with now. But Kennedy's growth and potential is impressive and we are convinced that being at this nexus between the transit hub in Jamaica. Connecting the airport to Jamaica not because it is Downtown Jamaica with some shops. They are connecting it because it is a transit hub; really significant one. All of Long Island Railroad trains except one come through there. The subway, the new subway and existing subway and buses pop in there. We are convinced they work. There were skeptics and there are still people wondering what the ridership will be, but we have done some homework on it. We were very supportive of that tremendous investment. The station itself at Jamaica is about I think the contractor just said two forty-seven million and an another hundred million will probably go into it which will include rebuilding all of Jamaica stations as well. It is that new building that we call the base building there that we believe will generate new potential for Jamaica.

So I don't want to talk too much about who we are and what we do, but we have enjoyed this public private partnership. Does mean we have had wonderful elected officials and leadership from government and government has really come through there. In the private sector now we are wooing heavily and our marketing we are doing more and more marketing to promote the potentials. We have had great support from the utilities and banks. One of the points I make not for profits leading in this effort is that we don't go anywhere just like churches. We have a stake in the area and we don't have alternatives to pick up and move to flushing or some other place. We stick with the projects and we try to make it happen and you will see our persistence pays off. Our persistence is there. We don't ever accomplish a project quickly. It is partly the conditions that are there, urban conditions and whatever. It is partly market and it is partly I guess our -- we are entrepreneurs, but we are not in it for profit making reasons. We are in it to do it right and have the right partners.

I do want to and I want to mention in connection with that when I hear churches I like Edwin (inaudible) and I hear frequently faith based institutions talking about their own community development and I am reminded of them. Alan Hevesi declared -- Floyd Blake was having a presentation in the cathedral and the mayor was there and Floyd discussed this project. When Alan Hevesi came up to make his remarks he said this is the only Reverand I know that will make a real estate deal from the pulpit.

I want to leave with you three things I think the new mayor has to do and I see some representatives. We are not since John Lindsey had a mayor who brought to bear on Jamaica, city powers that are required. We have soft land. We have lot of opportunities. We have a wonderful working relationship with the Port Authority and the MTA and we think government at one level or another has got to do this zoning like Edwin says in South Jamaica (inaudible) Downtown Jamaica. It is related to the shopping center era and not the current era. Then the thing that troubles me most about the city's economic development policy or lack of it is what I call a medical distribution of government employment.

I hope my facts are correct here, but there are five hundred and fifty thousand jobs in city, state and federal agencies in the City of New York. One the boundaries, five hundred and fifty thousand. How many of those do you think are in Manhattan and how many in Queens and how many in Brooklyn? Well, again, I hope my facts are correct, but Manhattan has about eighty-two percent of all the government jobs. They are still very much concentrated in Manhattan and in fact, a fifth of all the jobs in Manhattan government, twenty percent of all the jobs in Manhattan are government. No wonder Manhattan swings, if I can say that. Queens has six percent. Brooklyn, I think even with the new projects there has eight percent. So there is in my view a maldistribution of economic activity that constitutes, that the government can provide if it seriously wanted to, act on behalf of the borough. So I'll leave you with that mantra and thank you for this opportunity.

MR. WOLLMAN

WOLLMAN: This morning I would like to quickly introduce Joseph Mattone, Chairman and CEO of Mattone Group. He is a member of the New York State American Bar Association, Queens County Bar Association and Columbia Society of Real Estate Appraisals as well as a member of St. John's University Counsel. Joe previously served on the Board of Directors of the (inaudible) City of New York and was a member of the Jackson Street Settlement Board of Directors and a long, long, long list of other organizations and activities that only time prevents us from really sharing with you. Please welcome Joseph Mattone.

MR. MATONE

JOSEPH MATTONE: I'll be very brief. We have had a very intense morning and I just want to let you know we're a small development firm of Queens consisting of my older son Carl, who does our construction and leasing, Mike Mattone who handles our financing, Phil, who does our residential development, Chris Todd who is our general in house counsel. Our Director of Development (inaudible), my two daughters Irene and Teresa who are (inaudible). And my name sake and favorite son Joe Jr. And it says here Mike Mattone wrote this outline, you better be careful.

Best way to address the future of Queens is a very brief analysis of the two projects recently completed under the construction in Southeast Queens. (inaudible) I don't want to put him to sleep. In no small part site one in Jamaica was due to the efforts of greater Jamaica and Carlisle Towery in particular. Springfield Gardens, Pathmark Center. Got involved because two gentlemen (inaudible) got tired of it. It was a process that was being pushed by (inaudible) who felt they never had a supermarket in southeast Queens. They would call themselves the QCO, the Queens County Organization under the direction I guess and quiet support of Claire Shulman, who really was proactive and recognized that there were perhaps some legitimate fears in the community as represented by the elected officials and some of the business people felt this would cause a disruption of their earning power which was legitimate, but as if turned out it wasn't. This project is located at the intersection of Merrick and Springfield Boulevard. We began negotiations to buy out this in 1996. Not quite as long as Muss talked about his development, but five years to get it on the way. The site was sold by Nynex to us and it housed a large warehouse facility which we had to tear down. That was eighty thousand square foot of -- built like a fort. We started construction in April of '99 and we opened for business in March of 2000. The project, thanks to the Lord was one hundred percent (inaudible) because it was new for the area. It is currently one hundred percent occupied. The project size by some standard is small. It is a hundred thousand square feet, but the major tenants did include Pathmark, Blockbuster, Payless shoes and New York City Health and Hospitals Corporation. The total development cost was twenty-three million dollars. It created over three hundred and fifty construction jobs and four hundred and fifty permanent jobs that that community was really grateful to have. Pathmark store made it one of the highest grossing stores in Pathmark's chain of over a hundred and thirty stores.

The history of the meetings with the QCO and ministers was something that appeared in the New York Times on page one and where I was asked that I am losing my mind after four years of meetings but we hung in there. Got the thing past the necessary zoning and community doubts if you want to call it that. We had other problems which is enough to discourage anybody because Nynex, New York Telephone then became Nynex, Nynex then became Bell Atlantic and what happened was we had twenty-three adjournments for closing and that's with all the pricing we did, four years that were kind of -- live with because the (inaudible) didn't want to change the (inaudible). Construction financing was arranged by my son. The project has become an outstanding success not just for Pathmark and the other tenants and the developer. It has become a fixture embraced by the community as exemplified by the New York Times article which at first started out I think to be negative as to the NIMBY syndrome of not in my backyard. How it turned about that all of a sudden the commitment that was made by the Pathmark people to allay the fears of the community they were going to contribute a certain am of dollars anyway was never pressed anymore. It was a real problem between the City Counsel and mayor's office about whether or not that was a proper thing to expect from a tenant and things of that nature that I won't get into. The matter of property did resolve itself with no great deal of help from the Office of the Borough President and I am sure Mr. Magnani had his finger in the pie there somehow to try to get things worked out which it did and that's how it got done. But it is now currently a thriving shopping center and it has a difficulty getting parking on holidays especially.

Jamaica site one which we kind of shown it together with Greater Jamaica in the early days trying to understand that their function as Carlisle put it is the second arena for development and that's exactly what we found ourselves doing with EDC on the other side of the table and trying to construct a view that we could live with the development force. It is a full block located surrounded by Jamaica Avenue and 160th Street. It has got a tremendous subway passenger over there. As a matter of fact they have the underground tunnel. Then they have the escalators all in place. The site was formerly a circus parking lot undeveloped for some twenty plus odd years. Many prior developers of note I think Carlisle knows who they are but tried and failed unsuccessfully to develop it. The project size we wound up with was four hundred and eleven thousand feet consisting of 211 for parking. Retail on the first two levels plus a theater on the third level which was a stadium seating arrangement for about thirty-five hundred seats. We began construction in June of 2000 and our projected opening date would be in the middle of spring in 2002.

The (inaudible) thanks in no small part to the effort of my sons and their constant tenacity in trying to get the tenant to understand this was a market that should be served and that the income levels were there. The major tenants include over there National Amusements, the parent company of Viacom and Gap Jeans about fifteen thousand feet, Old Navy with thirty thousand feet, Walgreens with thirteen thousand feet, a Bally's Total Fitness, twenty-six thousand feet and smaller tenants are located through out the project.

Then there is two levels of garage below ground. The project is in the process of completion and the side walls are going up. We created about five hundred construction jobs over the life of the project and about six hundred full time jobs. The project was conceived in part by me because we were told by Carlisle one of the problems were I think on Jamaica Avenue was that the stores were (inaudible) too early and one of the things something that could extend the day, if you would, like a theater would definitely be for the economic development of the merchants and community. They could have better shopping time and the merchants could have a longer period of sale. We were able to do that. We convinced Natural Amusement this was the place for them to be and they signed the lease and they did some construction right now. They did make the thirty-five hundred seat commitment which is a very big theater even by their standards.

The project, in addition to that and that was the most difficult part of the deal was to turn the national tenants as Carlisle told you there are very few vacant stores along Jamaica Avenue. Those are the moms and pops. The help we got from Mike Carey at EDC and Magnani and the Borough President's office in terms of dollars and the office of the mayor and the City Counsel. These were the guys who helped make it possible. Empire State Development Corporation; without their help in it was impossible to make this work economically. Just was impossible because we couldn't generate the (inaudible) because of the powers of the national retailers for that community. Now that it is done and going to operate soon all those fears are probably past. But bringing them to that point on the table was a very difficult thing but we hung in it and were able to get the business investments (inaudible) to give us the fifty-eight million dollar mortgage we needed to make the deal work. The total project cost was eighty million dollars.

For a process it took us six years to get it to completion. We had to do a lot of arm wrestling in all fairness with EDC to create the esoteric formula for internal rates, but we did and the issue was there was no other way to do it. We acknowledge publicly that the office of the Borough President who played a great role proactively here for Jamaica for this deal is going to Pathmark. Pathmark involved fortitude to get it done in a community that had certain reservations. Jamaica needed dollars as well. To get, I think as Carlisle described it, our fair share for Queens and I think we were able to get some of that recognized through the office of the Economic Development Corporation and the people who serve with it. We had to thank publicly the Office of the Governor, Empire State Development, the Borough President of Queens, the Port Authority, the City Counsel. All of these people were necessary in terms of availability of dollars to make the deal work.

During the course of the two projects even though we are Queens based we learned a lot about the Queens economy and many factors as to why we think Queens is poised for future tremendous growth as you may have heard some of these remarks. The density of the existing population. Queens continues to serve as a mecca for the new immigrant population. We have heard that. Especially in the New York down state area. Queens has had the largest population growth second only to Staten Island and that kind of statistic is misleading because we all know Staten Island is small; the population compared to Queens. But what is interesting is the population with the disposable income. We were impressed that the disposable income levels available in the market served by these two projects. In fact, we came to learn that the average black household income in Queens County exceeded the average white family income. The New York Times to support that statement. Queens has a well developed mass transit system. It makes the Queens a hub for not only interborough but intraborough traffic. You got maps, Long Island Railroad, bus lines. You have seen those. It would be repetitious for me to tell you all about something you already saw and heard. The issue became for our thoughts that there was a pent up demand for sales availability in Queens County with a population of two million plus. Although retail has now come online existing retail is insufficient and the rate of new development has not kept pace with the population growth. For example the Queens Mall is the only major enclosed mall in a county with more than two million people. As a result, has the highest grossing mall in the nation in terms of sales for square foot. Retailers and investors are beginning to rediscover Queens. We were lucky we got to like it a long time ago.

In addition to our retail investments the Mattone Group is currently building a hundred and thirteen single family homes, luxury homes in Crest Haven. That is the site of the old Crest Hollow (inaudible). It has been encouraging because we built the first building. Sold out over a matter of six weeks and that was in the six hundred thousand dollar one family range. The second phase was twenty-seven. We sold twenty-five of those and that was in the seven hundred thousand dollar range. The reason we are telling you this is because it is significant to know where do those people come from? They came from Queens County. The overwhelming majority who could afford to live elsewhere chose to live in Queens County. I think that tells us why you heard earlier speakers talk about people elsewhere trying to imitate Queens County. That's one of the flag notes we have experienced in our own development program. People are willing to come back to Queens and those who haven't left are not going to.

In summary, I would like to publicly thank the Office of the Borough President, Mr. Magnani in the absence of Borough President Shulman, the New York State Economic Development, the New York City Counsel, Peter Vallone. The only obstacles to growth in Queens is we got to avoid the NIMBY concept or a program which is discouraging unless you kind of hang in there. We did because as Mr. Reed spoke to you we dealt almost on a monthly basis with Community Board 12. We got their input, what they wanted, how they wanted things done and we took their advice quite seriously and that's why we got their unconditional support. It is still a batting curve to teach retailers that Queens is a place to do business. The market, not saturated yet and Queens is a great place to do business. You can take a look at the Pathmark we put up, College Point Multiplex, the Queens Mall and its expected development.

There is a substance of growth that only can and should be tapped upon by developers when they look for development areas. The only other thing is what we were trying to help provide is what should be done is maybe some more affordable housing or residential components that would address only the income levels of the low income, middle income who seem to be a neglected crowd. And establishing maybe in Jamaica some type of program development and I am sure (inaudible) has his studies, a success that Brooklyn is doing with MetroTech. Maybe there is some way of duplicating that in a more if not confined area. So that the jobs that MetroTech developed which is in the range of seventeen thousand can definitely come to Downtown Jamaica and help make it be the community I know it could become. Thank you very much.

MR. WOLLMAN

WOLLMAN: I think you have seen why he was the concluding speaker of the day. As I told you there is some coffee and sparkling water on that side. I want to thank with you I know the efforts of each of the projectors today who put so much time and effort into their individual presentations today. Thank you.

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