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|A model shown to potential immigrant investors in China in 2014,|
though not shown publicly in Brooklyn.
This watchdog blog, by journalist Norman Oder, offers analysis, commentary, and reportage about the $4.9 billion project to build the Barclays Center arena and 16 high-rise buildings at a crucial site in Brooklyn. Dubbed Atlantic Yards by developer Forest City Ratner in 2003, it was rebranded Pacific Park in 2014 after the Chinese government-owned Greenland Group bought a 70% stake in 15 towers. New York State still calls it Atlantic Yards. Contact: AtlanticYardsReport[at]hotmail.com
|A model shown to potential immigrant investors in China in 2014,|
though not shown publicly in Brooklyn.
A veteran lobbyist who was a major supporter of Bill de Blasio’s run for mayor in 2013 saw his business nearly double in 2014 after his pal was elected, records show.The Daily News reported yesterday Record $71.9 million spent on lobbying New York City officials in 2014: report:
Jim Capalino reported hauling in $8.2 million from 237 clients last year — up from the $4.6 million earned by his downtown Manhattan firm during the last year of the Bloomberg administration in 2013.
The firm also signed 69 new clients, according to records released Monday by the City Clerk.
Capalino’s surge was enough to dethrone the city’s perennial No. 1 lobbyist — Suri Kasirer, of Kasirer Consulting, whose billings also rose, from $6.6 million to $7.7 million.
Power players are spending more cash than ever to influence city government officials through lobbying, a new city report shows.Before the report came out, The Real Deal reported 3/1/15, The influence traders, looking at some of the biggest lobbying firms representing real estate, including Kasirer, Geto & de Milly (which has worked for Forest City), and Wilson Elser, also "the go-to firm for the Real Estate Board of New York when it outsources its lobbying activities in Albany."
Lobbyists brought in $71.9 million to target city government in 2014, a record high, according to the report by the city clerk’s office covering the first year since Mayor de Blasio and the new City Council took office.
It’s about a 15% jump from the year before, when $62.7 million was spent on lobbying city officials.
At Forest City Ratner, for example, the person running the external affairs department is Ashley Cotton, a former campaigner for Andrew Cuomo’s attorney general bid who went on to work for the New York City Economic Development Corp. and the Bloomberg administration.
That Forest City could be instructive in this way will perhaps come as a surprise to the company’s many detractors in New York City. The company’s decade-long effort to redevelop Atlantic Yards garnered fierce resistance from community groups. The project was fraught by local opposition and complaints of political favoritism (though the progressive Mayor Bill de Blasio, a close ally to Ratner, was a staunch supporter of the project when he was the local councilman). The project, now known as Pacific Park, even has an entire blog focused on digging up dirt about the development.My comment (pending as of this moment)
Forest City’s effort to build the city’s tallest modular building, known as B2, broke down last year when the company’s development partner, construction giant Skanska USA, shut down their Brooklyn Navy Yard factory. Skanska said Forest City provided a defective product. Forest City said Skanska’s management was incompetent. It was such a bitter dispute that both sides sued each other and ended up going their separate ways.
In one email that came out of the suits, Skanska executive vice president Mike McNally told his colleagues that some people at Forest City had been openly hostile toward him in a phone call. The call started with Gilmartin, he said, but she passed the phone off to another executive. Forest City leaders said that if Skanska did not come to a meeting willing to agree to their plan, it was best if they didn’t come at all, McNally claimed. “After about 10 minutes, I mentioned that we would also like to discuss the financial impact at the meeting and they went crazy,” he wrote. “They were threatening and insulting.”
Whoever’s account of that call is true, one thing is clear: it’s a tough industry, and clearly one in which Gilmartin and her crew have been able to thrive.
o Deliveries to the Atlantic Avenue crane location will be made through the wide gate entrance along Atlantic Avenue. Delivery trucks will back into the gate; Flagmen will be present to direct traffic.Note that the deliveries in the previous update indicated the B3 crane location at Dean and Sixth Avenue. Also note that the partial stop-work order temporarily suspending such deliveries went unmentioned. That seems to be a significant lapse.
• During this reporting period, installation and testing of 24” diameter caisson piles will commence in Block 1120.* Compressors located on the 6th Avenue Bridge will be utilized for this work.Note that it was supposed to commence in the previous period. This could get loud.
• Temporary utility relocation work at the west portal will be ongoing during this reporting period.Previously it said such work would commence.
• Preparations for temporary decking installation and tunnel girder installations will be on-going in the west portal area during this reporting period.This is new.
• LIRR personnel are scheduled to perform weekend work (with assistance from yard contractor) beginning the weekend of February 27th. Work will entail the re-routing of electrical cables within underground duct banks that provide power to the tracks in the yard. Work will take place at the northwest portion of Block 1120 and is expected to take a minimum of two (2) weekends to complete. Work will be continuous throughout the weekend, commencing Friday night through Monday morning, and is being done during weekend hours because it requires all power to the tracks to be shutdown. During nighttime hours, work area will be illuminated by rail yard lights.Previously the work was to begin as early as the weekend of Feb. 20
o Installation of foundation waterproofing and pouring of foundation walls will commence during this reporting period.*This is new.
Peter Zepf, the 52-year-old worker, died when four steel beams rolled off of a truck as they were about to be attached to a crane, police said. Emergency responders arrived at the site at 1:33 pm and found him lying dead on the loading dock, according to a police report. Zepf was a member of the Ironworkers Local 361 union, and was working for a Massachusetts steel company contracted by Hunt Construction Group.
The federal agency in charge of work place safety is also performing an investigation into the incident, which could take several weeks, according to a spokesman. But that agency only issues fines, and cannot stop work.
[Jay] Neveloff, who represents Forest City Ratner in its partnership with Greenland, noted that condo projects now can actually offer a “double-edged advantage.” Not only do condos allow Chinese investors to get a piece of U.S. real estate, but they can also turn around and market those condos to potential buyers in China who increasingly want investments here, too.
“It creates a huge market for potential sales,” he said.
But while the appetite for New York real estate has been strong among Chinese investors for a while, it recently ramped up because of a unique combination of factors, notably a rapidly appreciating Yuan, the slowing Chinese economy, and high property prices and complicated ownership rules in China. In addition, the growing middle class in China is increasing turning to institutional investors (like insurance companies) to manage and invest their newly acquired wealth.
Still, those factors pale in comparison to recent regulatory changes in China — namely looser restrictions governing how much money Chinese companies can invest abroad.
...New York developers and property owners are already gaining in a big way, thanks to the aggressive bids from Chinese buyers that have helped to push up sale prices. “They’ll accept a lower rate of return for being in the New York market, which gives them an advantage. They’ll pay more, for good reason, than a private equity firm or investor will with a five- to 10-year horizon,” said Jay Neveloff, chair of the real estate practice at Kramer Levin Naftalis & Frankel. “It’s a great strategic move that gives them a significant advantage in buying properties.”
In many cases that long-term investment strategy has given them a leg up against competitors in New York, particularly private equity firms and REITs.
|Buses lined up on Bergen Street and Sixth Avenue|
While NBA All-Star 2015 was another big success on the books for Barclays Center, it was also another major showcase of the entire borough, with community events held at venues across Brooklyn, including:Digging deeper
- NBA House at LIU Brooklyn The historic Paramount Theatre was “transformed into basketball-themed activities showcasing the excitement of the NBA and the game of basketball for fans of all ages”.
- Day of Service at PS 9 Prospect Heights, Brooklyn Only a few blocks away from the arena, NBA All-Star Dwyane Wade, NBA Legend Jason Collins, Barclays Center & Brooklyn Nets CEO Brett Yormark and Brooklyn Borough President Eric Adams dedicated a new court and led students in an afternoon basketball clinic promoting a healthy, active lifestyle for children and families. (Jason posted some great pictures of the event – check them out HERE!)
- NBA All-Star Fit Celebration Amidst many first-time undertakings at NBA All-Star 2015, the league hosted basketball and fitness clinics in 100 public schools (20 per borough) during the NBA All-Star FIT Celebration on NBA FIT Friday, Feb. 13th – highlights from the other 99 schools can be found in the link! Thank you to the NBA, the NYC Department of Education & Kaiser Permanente for their support in bringing these special events to life.
Finally, I want to take this opportunity to thank the NYPD 78th Precinct, our neighbors and all civic leaders for their time and consideration in working with us to pull off this extraordinary event.
In the service of a safe and expeditious circus load-out in winter weather conditions, the NYPD will introduce and direct several temporary changes to vehicular traffic on the arena block later this evening.Couldn't they have announced this as a possibility a bit earlier?
Beginning at 6:30pm tonight, the arena block will see a heavy volume of circus trailers coming to load out the show. At times, there may be traffic freezes & vehicle restrictions on the following blocks:
- 6th Avenue between Atlantic Avenue & Dean Street
- Dean Street between Flatbush & 6th Avenues
All crosswalks will remain clear and fire lanes will be preserved at all times, with constant contact and coordination w/ FDNY & NYPD 78th Precinct.
Thank you very much for your time and consideration in this matter.
|Click to enlarge|
President Obama’s most recent budget proposal takes aim at a tax exemption that has helped drive an explosion in publicly-financed sports facilities across the United States, a move that would end federal taxpayers’ role in subsidizing the construction of stadiums and arenas that often provide little economic benefit to their cities and states.
As it stands now, cities and states can help pay for stadiums by accessing tax-free government bonds that have below-market interest rates subsidized by the federal government. The budget Obama released Monday, however, repeals the tax-exemption from the bonds that finance sports facilities if more than 10 percent of the arena or stadium is dedicated to private business use.
Because almost all professional sports stadiums and arenas would fail that test, the Obama proposal would virtually eliminate a tax exemption that provides millions of dollars in federal subsidies each year to sports facilities. States and cities would instead have to finance stadiums with bonds that are not tax-exempt, raising the cost of an already pricey endeavor in a way that could affect the way lawmakers and local taxpayers view the deals.
“Perfect. You couldn’t do it any better if you believe like I do that we should not finance these things with tax-exempt debt,” said Dennis Zimmerman, a retired economist who worked for the Congressional Research Service and Congressional Budget Office and now serves as the director of projects for the American Tax Policy Institute. In a 1996 paper for CRS and in other publications, Zimmerman examined the tax exemption on government bonds used for sports facilities and recommended eliminating it.
|NYC Independent Budget Office|
Since stadiums and arenas are almost by definition used for private events more than 10% of the time, sports team owners immediately made sure that they wouldn’t get caught in this trap by focusing on the other test, and ensuring that at least 90% of bond costs would be paid off by generally applicable taxes. This required jumping through some fancy hoops at times — sometimes dividing up bond issuances into one publicly paid tax-exempt set and one privately paid taxable set, sometimes pretending that private rent payments are really tax payments and convincing the IRS to go along with it — but has consistently worked out over the years, so far costing taxpayers $4 billion in foregone tax revenue.The Washington Post's Wonkblog, 2/5/15, It’s time to stop letting sports team owners blackmail taxpayers for new stadiums:
"It's a silly tax break," said Matt Gardner, director of the Institute on Taxation and Economic Policy [a non-partisan research organization]. "It's ludicrous that the federal government would be subsidizing state and local borrowing to give investors tax breaks to make it easier for them to build sports stadiums."The hearkens back to a 9/5/12 article from Bloomberg, In Stadium Building Spree, U.S. Taxpayers Lose $4 Billion:
...Dennis Zimmerman, the director of projects at the American Tax Policy Institute, made a similar suggestion in a report 19 years ago. ["Tax-Exempt Bonds and the Economics of Professional Sports Stadiums," Congressional Research Service, May 1996] "I'm pleased," he said. "And I don't think it stands a snowball's chance in hell."
Tax exemptions on interest paid by muni bonds that were issued for sports structures cost the U.S. Treasury $146 million a year, based on data compiled by Bloomberg on 2,700 securities. Over the life of the $17 billion of exempt debt issued to build stadiums since 1986, the last of which matures in 2047, taxpayer subsidies to bondholders will total $4 billion, the data show.That article reflects on the attempt at reform:
Those estimates are based on what the Treasury could have collected on interest from the same amount of taxable bonds sold at the same time to investors in the 25 percent income-tax bracket, the rate many government agencies assume. In fact, more than half the owners of tax-exempt bonds pay top rates of at least 30 percent, according to the Congressional Budget Office. So they save even more on their income taxes, a system that U.S. lawmakers of both parties and President Barack Obama have described as inefficient and unfair.
...The new generation of publicly owned stadiums was designed to increase revenue from high-priced seating as well as concessions and retailing. The venues have helped double the value of sports franchises since 2000, according to W.R. Hambrecht & Co., a financial services firm.
Almost 20 years earlier, U.S. lawmakers from both parties set out to block muni bonds for municipally financed stadiums as part of an attack on public borrowing for private businesses, according to former Senator Bob Packwood, the Oregon Republican who was chairman of the Senate Finance Committee.The AY angle
“We wanted to limit it,” Packwood said in an interview. “It was one of the most egregious uses of the part of the tax code that allowed for industrial development bonds. It was clearly not what the tax code had in mind when tax-exempt bonds were authorized.”
...The wording of the law encourages cities and states to offer more-favorable terms to pro teams wanting financial assistance while preventing the borrowers from using stadium revenue to pay off the bonds, he wrote. The measure functions as “an open-ended matching grant” for stadiums, he said. Cities and states borrowed more money backed by tax revenue, not less, to make sure that no more than 10 percent of a stadium’s debt payments came from a private business, Zimmerman said.
...Not all of the subsidy goes to the city, based on a 2009 report from the Congressional Budget Office and the Joint Committee on Taxation. Researchers found that just 80 percent of the amount the Treasury gives up because of the exemption serves to reduce a municipality’s borrowing costs. The remaining 20 percent amounts to “a federal transfer to bondholders in the higher tax brackets,” according to the report...That’s because people paying the top marginal rate get a disproportionate benefit from the exemption.
While one may legitimately question the costs and benefits to a particular metropolitan area of attracting a professional sports team, there appears to be no rationale whatsoever for the federal government to subsidize the financial tug-of-war among the cities to host ball clubs. If there is a global welfare gain from the relocation of a team from city A to city B (because city B may be larger or wealthier or have more avid sports fans), then city B ought to able to pay for that gain without a subvention from Washington, D.C.