Gag Me: Why Do Mr. Sitt and Mr. Ratner Like Silence?

As anyone who's been following the Thor Equities Coney Island saga or the earlier Forest City Ratner buyout of property owners in the Atlantic Yards footprint, confidentiality clauses are the latest fashion accessory in development deals. The new issue of the Real Deal offers a nice picture of the trend:

Thor offered its tenants in Coney Island the opportunity to stay on for one year. In return, the business owners must remain silent about redevelopment efforts that "may generate opposition from other landowners, businesses and certain members of the public" for four years after signing...Violators would pay $10,000 to Thor for each infraction.

In addition to stipulating that tenants promise not to "engage in any activities intended to oppose or address the redevelopment or rezoning of Coney Island," including public speeches, rallies, parades or marches and the gathering or signing of petitions, it also forbids them from making "any statement to any person concerning or relating to the redevelopment activities of [Thor] or its members or affiliates."

The developer says the gag rule is necessary not to keep tenants from speaking out, but to protect confidential information.

Thor said confidentiality requirements are necessary because the developer is providing information to bought-out tenants that it does not want made public.

"Thor offered all of the tenants, licensees and operators on the Boardwalk the opportunity to remain for an additional season and to be a part of the permanent project moving forward," said Lee Silberstein, spokesman for the company. "In the process, it became clear that Thor would be sharing confidential information with them and therefore decided the confidentiality clause is needed."

This doesn't explain how participating in a demonstration would betray "confidential information," but okay.

The story also notes that "at a time when development projects face concerted, organized opposition -- thanks in part to blogs, which give anyone an electronic soapbox -- it makes sense to buy the silence of the people most directly affected by a development: the ones who are displaced."

Related Posts:
Speak No Evil: Thor Tenants Required to Sign Confidentiality Clause
Legal Gag Removed, Coney Island's Lola Staar Speaks