Thursday, December 14, 2006

Times follows up on ESDC revenue revision; Post editorial page ignores it

In an article headlined Agency Cuts Atlantic Yards Revenue Estimate the Times followed up on the Empire State Development Corporation's revenue cut, a story broken yesterday on this blog:
A state development corporation has drastically decreased its projections for the amount of sales and income tax revenue it expects from the proposed Atlantic Yards project near Downtown Brooklyn.

In the online coverage, but not the print edition (page B4), the Times added some skepticism from an outside observer:
The estimates themselves are largely educated guesswork, relying on assumptions about how many new jobs would be created in a given square footage and how much revenue those jobs would produce.
But it was unclear how a loss of less than 300,000 square feet of office space could account for about a half a billion dollars less in tax revenue, especially considering the project's overall size.
"The cutback on the commercial side is going to have an effect, because that is where the revenue is," said Doug Turetsky, a spokesman for the city's Independent Budget Office. Mr. Turetsky said that the office had not examined the studies behind the estimates, but that "on its face, it seems like a large revenue falloff given the amount of commercial space being cut back."


Cuts in print

Why exactly was that critical segment cut? Obviously, pages change during editions. The rest of page B4 included a "Blocks" feature on logos, a police shooting and a continuation of an article on threats by Yoko Ono's driver, the last two late-breaking. These paragraphs did appear on that page:
Neighbors said they knew that Mr. Karsan was a chauffeur who often drove a black luxury sedan to and from Manhattan each day. Most neighbors interviewed said they did not know for whom he worked, but two real estate brokers who work out of a house next door said they did.
“He wouldn’t say much about Yoko, very closed-mouthed about her, never said anything detrimental,” said Gertrude M. Follett, one of the brokers. “He loved his job and we always assumed she was happy with him. He was a charming man, always impeccably dressed. We never would have thought he would do what they’re saying.”
“Total shock,” said the other broker, Dolores Fox. “Total shock. I hope it’s not true.”
Elys Collado, 25, another neighbor, said that Mr. Karsan had rarely spoken to her since she moved in three years ago, but that he was friendly.
“He recently carried in my new TV set for me, but even then he barely said anything,” she said. “Yoko Ono, that’s a good job to have. Why would he do anything to mess it up?”


Is this of more critical public importance than Turetsky's comments? Brutally weird.

Memo coming?

Back to the ESDC. The Times reported:
The development corporation said it planned to release a memo within a few days to explain its estimates.

Why was this not available as part of the documents released last Friday?

Post coverage

The Post played it straight, in an article headlined NET ARENA OVER$OLD:
The news of the drop-off, uncovered within hundreds of pages of agency documents, has project opponents hopeful that the Public Authorities Control Board in Albany will determine the financial projections are filled with flaws.
The PACB is set to decide the fate of the arena - where Bruce Ratner wants to move the New Jersey Nets - next Wednesday.
Officials with the development company yesterday said the project is still financially sound.
They attributed the revenue loss to Ratner scaling back the development size by 8 percent at the request of the City Planning Commission.


There could've been more skepticism there about the ratio between the reduction in revenue and the reduction in size.

Post editorial

There could've been a lot more skepticism on the Post editorial page, which endorsed the project in an editorial headlined ATLANTIC YARDS QUESTIONS. The Post used the same figure cited Sunday in the Daily News: $5.6 billion in new tax revenues.

That figure, apparently provided by Forest City Ratner (and adjusted from a $6 billion overestimate), was contradicted by the original ESDC figure, and further contradicted by the revised ESDC figure. Do the Post editorial writers read their own newspaper?

(I believe the $5.6 billion figure represents the cumulative value of the projected tax payments, rather than the standard formulation, which uses present value.)

Board ignorance?

The Times added some context:
The new estimate was included in a statement and other documents issued by the development agency on Friday, but the difference went unremarked in both the brief board meeting that preceded the approval vote and the news conference that Charles A. Gargano, the agency’s chairman, held shortly afterward.

Indeed, the board of the ESDC, which met last Friday for only about 15 minutes, did not publicly consider the project's fiscal impact. Wouldn't a responsible agency have briefed them about the nearly one-third drop in projected new tax revenues? And wouldn't a responsible board have given it some thought?

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