The Times Union (Albany, NY)

June 2, 2004 Wednesday THREE STAR EDITION

SECTION: MAIN, Pg. A8

LENGTH: 473 words

HEADLINE: Profiting from 9/11; A program to rebuild downtown Manhattan is benefiting development far from ground zero

BODY:
Not many people were listening to Bettina Damiani in November 2002, when she excoriated state officials for approving $215 million in Liberty Bonds for two apartment towers in downtown Manhattan. They should have listened. What Ms. Damiani had to say back then is even more relevant -- and more disturbing -- today.

The apartment projects were part of the effort to rebuild downtown Manhattan in the aftermath of the Sept. 11, 2001, terror attacks. Liberty Bonds were the means to finance just such construction -- a source of $8 billion in federal funds that had been pledged to New York to help the city recover. At the time, Gov. Pataki set the right tone of inclusion when he stressed the need for affordable housing as part of any rebuilding plan.

But of the $215 million, it turned out, only 5 percent went for moderate-income units in the two new apartment projects. "Deliberately excluding poor and middle-income New Yorkers from these apartments is shameful," Ms. Damiani, a spokeswoman for the Liberty Bond Housing Coalition, said at the time. "Resources earmarked for New York's rebuilding shouldn't benefit only wealthy developers and high-end renters."

It's unlikely that any downtown redevelopment could be accomplished without the participation of wealthy investors and high-end tenants -- the very people who can take financial risks. But the Liberty Bonds program was designed to level the playing field for those of lesser means, and thus ensure that a diverse population would become part of the downtown renewal. Yet a recent report by The Washington Post, printed in this newspaper May 23, documented widespread abuse of Liberty Bonds, with millions of dollars going for high-end real estate projects in midtown Manhattan and Brooklyn, and upscale housing.

According to the report, $650 million went to one developer to build an office tower for Bank of America near Times Square, miles from ground zero. Another developer received $113 million to build an office tower for Bank of New York in Brooklyn. The actor Robert De Niro received some $39 million to build a hotel in his Tribeca neighborhood -- closer to ground zero but still apart from it. As for downtown itself, so many luxury apartments are being constructed that it is fast becoming one of New York's richest neighborhoods.

"Explain to me why helping Bank of America build a tower on one of the most expensive pieces of property in the world is a good use of these monies," says state Sen. Liz Krueger, whose West Side district includes the tower site. A good question, posed with a justifiable sense of indignation. But many New Yorkers would like it explained to them why other lawmakers and state officials didn't speak so indignantly long ago when Bettina Damiani was calling this situation to their attention.