Thursday, April 24, 2008

Brodsky seeks AY timetable, cost-benefit analysis in report on megaprojects

What might be the impact of the law (details from the New York Observer) proposed by Assemblyman Richard Brodsky that would require the Empire State Development Corporation (ESDC) to report within 45 days on the status of several megaprojects, including Atlantic Yards.

If passed, the law would require not merely a status report, but also would require a cost-benefit analysis that has so far not been conducted. It would require the ESDC to detail the full spectrum of public "incentives, benefits, subsidies, and revenues," the projected economic impact on the city, state, and metropolitan area, "and a comparison of expected benefits with anticipated costs."

That could be a watershed. The ESDC has produced a lengthy Final Environmental Impact Statement (see the last pages of the Socioeconomics chapter), as well as a General Project Plan, both of which estimate new revenues, but provide scant details on the totality of public subsidies and public costs. (The Independent Budget Office came the closest to estimating the total impact of the project, but shied away from a full study.)

It would be astounding if the ESDC produced a full cost-benefit analysis within 45 days. More likely the agency would supply an updated version of previously compiled documents.

Hearing coming

Even without the passage of the law, Brodsky pledged a hearing, saying, according to EmpireStateNews.Net, that "Our economic future is tied to our transportation system, and our first economic and social priority must be the funding of the MTA Capital Plan... The Governor has asked Richard Ravitch to Chair a gubernatorial Commission to address these issues. It is clear we are coming to a crisis. That crisis can be solved, but only with clear information and a willingness to set priorities, and make difficult decisions. The Committee will shortly convene a public hearing to inquire into the capital plan and other issues, in addition to awaiting the Report."

Of course, given Brodsky's role as a leader in killing congestion pricing, which would provided significant revenues to the MTA, he undoubtedly will face criticism for selective concern.

Then again, he has long taken a critical view of the ESDC; he chairs the Assembly committee that oversees state authorities and corporations and, shortly after the ESDC's passage of the Atlantic Yards project in December 2006 but before the vote of the Public Authorities Control Board, asked some (but, in retrospect, clearly too few) tough questions of the ESDC at a hearing.

Legislative rationale

The bill states:
The legislature finds that there are in the city of New York many large capital projects to be financed in whole or in part with public funds or to be supported by tax and other public incentives and which are crucial to the economic and cultural interests of such city and the state of New York as a whole, and which are at some stage of proposal, planning or implementation. The legislature further finds that it important that a full disclosure be made of the details of such projects, their projected costs to the city and state and to public benefit corporations, the projected benefits, the reasons why some of them have been delayed and why some of the proposals have been modified. Accordingly, it is critical that the New York state urban development corporation, also known as the Empire State Development Corporation, provide a prompt report to the legislature on such projects so the legislature can provide the necessary policy determinations and establish appropriate priorities so that necessary projects can proceed.


(Emphasis added)

Could "appropriate priorities" mean additional subsidies? Or a pledge for no more subsidies? Or a nudge to the head of the line for scarce affordable housing bonds?

Comprehensive report

The bill concludes:
The chairman shall prepare and deliver to the Governor, the temporary president and the minority leader of the senate and the speaker and the minority leader of the assembly not later than 45 days after the effective date of this act a comprehensive report on each of the projects individually and as they interact with and have any effect on the other. In preparing such report, the chairman shall consult with private developers, and government officials and agencies involved with each project, including without limitation, the port authority of New York and New Jersey, the lower Manhattan development corporation, the metropolitan transportation authority, the office of the mayor of the city of New York, the city council of the city of New York, and the governor of the state of New York, and other person or institution deemed appropriate. All such officials and agencies are hereby authorized and directed to consult with and assist the chairman in the preparation of such report.

Such report shall discuss all aspects of the progress of each project relating to planning, financing, permitting, contracting, constructing, and occupying such project, with comments on the current situation relating to organizational, legal, financial, economic and construction status and prospects, and the impact of such project, if any, on the capital needs of the Metropolitan Transportation Authority, with reference to differing opinions from various stakeholders and parties involved to the extent that such opinions exist. The report shall make recommendations with regard to the goals of each project and the recommended methods to achieve such goals. It shall also present an analysis of the potential financing of each project, including incentives, benefits, subsidies, and revenues to be provided by any governmental unit or public benefit corporation and the economic impact that the project is expected to have on the city of New York, the state of New York, and the metropolitan area centered in the city of New York, and a comparison of expected benefits with anticipated costs.


It is unclear to me that such a report would require, for example, the ESDC to answer various questions about timing and enforceability raised by the State Funding Agreement.

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