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Public obligation creep: city will spend $100M for AY land acquisition

It isn't news that some of New York City's cash contribution to the Atlantic Yards project would help Forest City Ratner with both acquisition of land and infrastructure improvements. That was contemplated in a Memorandum of Understanding (MOU) signed 2/18/05.

However, that MOU (p. 4) contemplated a city contribution of $100 million. In January, I reported the city's contribution has been more than doubled, to $205 million; the explanation was murky.

City explains funds

Now the Daily News (which passed on the $205 million story) reports that $100 million alone would go to land acquisition. In an article today headlined City: 100M for Yards land: Pols rip EDC plan to use public funds for private Ratner mega-project, the newspaper explains that the New York City Economic Development Corporation told City Council that $100 million would be for land and $105 million for infrastructure.

The criticism was swift. Council Member David Yassky said the "money should be spent on transportation infrastructure, schools and traffic calming" and Council Member Letitia James said it "should go to traffic mitigation and affordable housing."

EDC fudges the issue

The Daily News reports:
EDC spokeswoman Yonit Golub said the city's memorandum of understanding with Ratner had always included the possibility of buying land, as well as improving the infrastructure.

That's true. The Council Members protest a bit much about the uses of the city subsidy, given that it was announced more than two years ago. However, it was never contemplated that a sum that large--$100 million--would be used for land acquisition.

Apparently the really important part of the MOU was the declaration (p. 8) that it was non-binding.

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