NYC Wants A Grocery Store, Goldman Sachs Wants A Glorious Ballroom

Some New York City locals feel that they were promised a grocery store and maybe a hardware store when Goldman Sachs was approved to buy a building in their neighborhood, and are extremely upset to find out they’re getting a trio of restaurants from Danny Meyer, a ballroom and a conference center.

The glorious ballroom and restaurants will be replacing a DSW, a gym and a pizza place.

“It appears that Goldman has no intention of replacing this retail tenant with one more attractive to the community,” said a long-term area resident at a meeting of the area’s community board last week, according to the Telegraph.

“This loss of space seems to break the promise made to our community,” when Goldman originally got permission to purchase the building four years ago, the man added.

Goldman responded to the article by saying that not every retailer brought into the project would be expensive.

“This building is for public use, not just for Goldman use,” said their spokesperson.

Goldman Sachs faces public anger over plan to replace shops with designer restaurants near HQ [Telegraph]

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  1. benh999 says:

    Why would Goldman be obligated to find tenants for its building that neighbors find acceptable?

    • Level-Headed, Even-handed says:

      Because the promised to do that as a stipulation of being allowed to buy the building

      • madanthony says:

        Which begs the question “why should a company have to agree to specific tenants for a building they are going to own in order to be allowed to own it”?

        Can I require that the next time a house in my neighborhood goes on the market, that the buyer has to be a hot single chick who doesn’t believe in window coverings?

        • Bohemian says:

          Use permits and zoning.

        • Bongo25 says:

          Have you never heard of home owners associations? The same thing exists in some areas for other types of buildings. Communities can, and have (many times) stopped unwelcome companies from buying property.

        • Difdi says:

          You probably could. Nobody forces you to sell to the old, ugly guy, after all. You could also include a covenant in the sale, that restricts certain behaviors. One example, I used to rent a house the if you lived there, you couldn’t work on your car’s engine in the driveway or parked at the curb. Another example is the apartment I rent now, that doesn’t allow any kind of grilling equipment (not even electric) on the balconies. My parents live in a house that came with a covenant that forbade them from operating a saloon out of the house.

          Lots of properties come with deals like that.

      • Alvis says:

        ALLOWED to buy? How could they get turned down, if they’ve got the funds?

        • nosense22 says:

          Depends on the seller, as in if the seller was the city or state or some guy who really wanted to do something nice for the community.

          The solution is for the community to picket the restaurants and convince others to boycott.

    • PsiCop says:

      I could name any number of factors that might dictate usage (not just in NYC but anywhere in the US): Zoning regulations; the municipal plan; property covenants; environmental laws; and much more.

      You’d be surprised what property owners can be forced to do, or prevented from doing. While these rules may not seem fair (and some of them definitely are not!), the idea behind such rules — in theory — is to maintain high standards for the entire community. Properly done, zoning and use regulations add to the value of all the property in a community, even if they may inconvenience a few.

      As for the legality of zoning … on principle it’s held up to Constitutional review. Some specific zoning codes have gone over the line, but for the most part they withstand review.

      In the case of Goldman Sachs, they had plenty of opportunity to review what they were buying and what would be permitted there. If the regulations were too onerous for them, they should simply have opted not to purchase the property.

      Of course, that’s not to say zoning and land-use plans work well everywhere. They often don’t. And I can’t even begin to comment on NYC’s regulations or how well they work. What I’m saying is that, in principle, land-use regulations are supposed to benefit the entire community. Whether or not they do so in practice is another matter entirely. In this case the idea of neighbors dictating what can be done, carries a vague whiff of “mob rule” and, in general, that’s not a good thing. However, that “mob rule” appearance can be ameliorated, depending on how use is reviewed and approved.

      Again, however, even if these rules were overly burdensome, Goldman Sachs knew about them up-front, and cannot now plead ignorance of them or say they were blindsided by something that proved to be too much for them to deal with. If it is actually the case that these rules are too arbitrary and burdensome for Goldman Sachs to deal with, the proper legal remedy is NOT to just break the rules, but to litigate the matter in court. Sure, it might cost them a lot to do so, but them’s the breaks … and again, Goldman Sachs knew this in advance.

      Full disclosure: I once served on an elected zoning board in my hometown. I’ve also been involved in development of the town plan, and likely will be again.

      • Kevin411 says:

        Great answer, Psi. I can add another way this could occur. This applies more to new developments than existing ones, but could apply here for some reasons. Many cities have give-and-take on zoning which can be negotiated. Suppose Goldman wanted to put a larger sign on the building than the zoning code allows, or wanted to convert some of the residential space in the building to commercial…the zoning board could agree to allow that change in exchange for a promise of a specific retail mix or even for donating use of a portion of the building for community use. There is leeway for this, but the article stops short of giving the specifics.

        • PsiCop says:

          If this kind of “negotiation” is what took place, then I suspect the reason there are few specifics is because the deal is so nuanced that details are not easy for the reporters to discern.

          Where I live we don’t really have this sort of “fuzzy zoning” (as I call it) and I’m not a fan of it. It leads to too many arbitrary and nutty deals. But on the upside, lots of up-front negotiation means that a lot has been hashed out in advance, so that no one can later claim they were surprised.

    • Difdi says:

      Because they made a promise? Since when does that mean so little?

  2. twophrasebark says:

    This is standard operating procedure under the Bloomberg administration. Developer or company makes promises to get what they want; city gives them what they want; developer or company breaks promises; city does nothing.

    • Antediluvian says:

      Unfortunately, it’s not just NYC / Bloomberg. Most governments operate that way — very few boards will rescind permits when developers break their promises. The developers know this, so they promise everything and deliver the bare minimum they can get away with. It’s shameful, but because they have bigger lawyers than the small towns, they get away with it.

    • Fubish says: I don't know anything about it, but it seems to me... says:

      This has been happening in NYC for MANY, MANY years – way before Bloomberg ever even moved to the city. Developers have been given variances on buildings IF they toss the city a bone like this – or promising to have a “public” space or other public amenity. Unfortunately, they rarely follow through (public spaces are bare or non-existent or fenced off). This has NOTHING to do with the Bloomberg administration per se.

      • twophrasebark says:

        I disagree. It has gotten worse under the Bloomberg administration. They have been more aggressive in pursuing development and they make no secret about it.

  3. mergatroy6 says:

    I’ll take Shake Shack or Blue Smoke over Ace Hardware and King Kullen any day of the week.

  4. AllanG54 says:

    To quote Marie Antoinette when told that the peasants had no bread, “let them eat cake.” To heck with groceries.

    • Eldritch says:

      Yeah, she never said that.

    • serke says:

      The first written account of someone saying it was in Jean-Jacques Rousseau’s Confessions, completed before Marie-Antoinette had even moved to France.
      In it he attributed the phrase to an unnamed “princess” who is thought to be Marie-Thérèse, the wife of Louis XIV, who lived nearly a century beforehand.

      Also, in French it’s actually “Qu’ils mangent de la brioche”, and brioche is closer to say, a danish, than cake.

      *~The~More~You~Know!~

  5. c!tizen says:

    This makes no sense to me, surely Goldman Sachs is full of ethical, professional businessmen and women who keep their word and look out for the best interest of the community and it’s customers, right?

  6. NeverLetMeDown says:

    From the article:

    both the gym and the shoe shop had asked to break their own leases following falling sales

    • Conformist138 says:

      you skipped half that sentence. Truly copied from the article:

      Timur Galen, Goldman’s global head of corporate services and real estate, however explained that both the gym and the shoe shop had asked to break their own leases following falling sales – albeit admitting that the construction of Goldman’s tower could have had an impact on footfall to the area.

      Yeah, construction will hurt sales. Got a crappy economy and it’s not unrealistic to think the construction could put those locations out of business.

  7. peebozi says:

    Unfortunately, just because goldman says they promise doesn’t mean they won’t have their liars, er lawyers, fight tooth and nail to have the community prove that was goldman’s intent…that is to promise anything not in writing.

    blankfein should kill himself.

  8. Bongo25 says:

    It’s no surprise that Goldman Sachs, one of the largest scam companies on the entire planet, has little interest in what the local or international community thinks about their business practices. They treat people and communities like playthings and this is yet another example.

  9. econobiker says:

    Remember if it isn’t in a contract it doesn’t mean squat/merde/ etc. Any type of real estate developer can come before a “public forum” and say anything but that in no way is related to reality. The city/town/etc government must have those promises/statements in black and white contract.wording that obligates that developer and its successor developers (developers never go bankrupt right?) to the specifics of the promises along with performance bonds or guarantees . And then the same government has to be willing to pursue the issues and hold the developer to the contract.

  10. peebozi says:

    BREAKING NEWS: Goldman Sachs ROI on This Investment to Drop from 9.0% to 8.888889% (and they want that .111111111% back!!!!!!)…damn morals, ethics or law.

    They have liars on their payroll that they have to keep busy…yet, their legal department will never die…it will live as long as the corporation! Their corporation will outlive your mortal body…and they don’t have the threat of jail for illegal acts either.

  11. VashTS says:

    Bloomberg is a very evil man/mayor strong-armed his way to a third term here we are.

    In reality this is the evils of capitalism, which capitalizes on usually the poor and the rich gain. Where oh where is the hero who would save us all.

  12. Mecharine says:

    The last line is the punch line.