Thursday, December 07, 2006

City subsidies make little difference with AY?

An article in the New York Observer this week, headlined No, No, No. Yes. The Mayor’s Curious Evolution on Public Money for Private Real Estate, sketches how Mayor Mike Bloomberg has come around on the issue of city support for private projects. The paragraphs relevant to Atlantic Yards:
A city economic-development official said that capital subsidies—or, rather, investments—serve another purpose. “It provides the type of upfront capital funding that is needed in the early stages of the project, when it might be hard to get that money from other sources,” the official said.

Thus, the city is pitching in $100 million for Atlantic Yards, even though that project is so gargantuan—$4.2 billion—that it’s hard to believe it will make a difference. Opponents of the project argue that the public could end up paying much more, through indirect subsidies and also because the memorandum of understanding calls on the city and state to “consider making additional contributions for extraordinary infrastructure costs.”


Not just opponents

Actually, the Independent Budget Office toted up a long list of public costs, and the Empire State Development Corporation acknowledges both city and state costs.

The affordable housing subsidies, among other things, remain unknown. Indeed, three Assemblymembers recently warned “there has been, to date, no public disclosure of the project’s finances, including detailed cost analysis, anticipated public subsidies, and expected financial return."

Some criticism

Some criticism did surface in the Observer article
“It seems that the power of the real-estate industry was more than what the administration anticipated,” said Bettina Damiani, the project director of Good Jobs New York. “Ideally, the Mayor says, ‘Look, I’m a successful business guy; we are going to make the investments we need to make the city attractive in terms of police and affordable housing and education.’ To the extent that the real-estate industry is the big dog in the room, I imagine it was awfully difficult to hold the line.”

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