Agreement ends lobbying by EDC, subsidiaries

Coney Island Development Corp. affected

NYS Attorney General Eric Schneiderman on Tuesday announced an agreement with the city’s Economic Development Corporation (EDC) to end lobbying on behalf of the development projects in Coney Island and in the Willets Point section of Queens.

The Attorney General’s investigation found that, although local development corporations (LDCs) are barred by statute from any lobbying, the EDC and its subsidiaries Flushing-Willets Point-Corona Local Development Corporation and Coney Island Development Corporation had lobbied the City Council to win approval of their favored projects.

“These local development corporations flouted the law by lobbying elected officials, both directly and through third parties, to win approval of their favored projects. As a result of today’s agreement, these organizations will reform their practices to comply with the law and end lobbying through proxies in the communities they serve,” said Schneiderman.

In a statement, the EDC said its restructuring would be "seamless" and "enable the company to operate freely and legally in areas that are necessary and appropriate for it to achieve its economic development mission." It added that this restructuring would have little effect on its day-to-day operations.

Among the terms of the agreement are:

  • A ban on lobbying the City Council in connection with development projects;
  • A ban on employing lobbyists or government relations consultants, participating in the development of third-party communications with the City Council, using others LDCs to lobby, or otherwise lobbying indirectly;
  • Mandatory compliance training for directors, officers and employees; and
  • Public disclosure by EDC of any funding provided to other LDCs or personnel overlap with other LDCs.

The Attorney General’s investigation determined that EDC and its subsidiaries lobbied the New York City Council in connection with development projects in Willets Point in 2008 and Coney Island in 2009. These projects required City Council approvals pursuant to New York’s Uniform Land Use Review Procedure. These efforts included ghost-writing letters and op-eds and preparing testimony for unaffiliated community members.

Under New York law, LDCs have unique powers to receive real property from municipalities without appraisal or public bidding, in order to facilitate local development projects. While many types of not-for-profit corporations are subject to some form of lobbying restrictions, LDCs are subject to a total ban on lobbying under Section 1411(c) of the Not-for-Profit Corporation Law.