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Showing posts from June, 2008

FCR consultant Zimbalist adds millions to AY subsidy total, calls for ULURP hearings (not quite)

Andrew Zimbalist, the sports economist Forest City Ratner hired to produce a dubious study of Atlantic Yards costs and benefits, mostly dismissed a very big thing: the economic value of the tax-exempt bonds used to build the arena. And when writing about a very similar financing plan for the West Side Stadium, he called such bonds the equivalent of a public contribution.

So, would the $800 million in tax-exempt bonds for AY count as a public subsidy? Not under Zimbalist's logic, given that, in a 1/22/06 New York Times op-ed, he blessed a similar financing plan for the new Yankees Stadium, contrasting it with the West Side Stadium by noting that "the Bronx is already in a tax abatement zone."

But maybe that's not quite right--and it deserves scrutiny as the State Assembly takes up tax-exempt financing for the Yankees, if not the Nets, during a hearing on Wednesday.

There's increasingly less justification for such tax exemptions. Just as the city's longstanding 42…

To federal regulators, ESDC claims Forest City Ratner has "acquired" 85% of AY site

I've already pointed out how, in a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department, the New York City Industrial Development Authority and the Empire State Development Corporation (ESDC) cite Forest City Ratner's chimerical ten-year timetable in arguing that the PILOTs (payments in lieu of taxes) plan for arena financing should stand, even though the feds want to change the rules for tax-exempt bonds.

Here's another stretch. According to the "Atlantic Yards Chronology" (p. 6 of this PDF):
Forest City Ratner Companies ("FCRC"), the developer of the Project, has already acquired approximately 85% of the project site.

The word "acquired" covers a lot of ground. On the developer's own web site, the FAQ states:
With recent acquisitions included, FCRC now owns or controls 86 percent of the land needed for Atlantic Yards.
(Emphasis added)

What's the difference?

Here's a December 2006 property ownership map from the Emp…

Tax-subsidized stadiums vs. early childhood education? An expert's view

During the 10/10/07 hearing, Professional Sport Stadiums: Do They Divert Public Funds From Critical Public Infrastructure?, held by the Subcommittee on Domestic Policy of the Committee on Oversight and Government Reform, Arthur Rolnick, Senior Vice President and Research Director, Federal Reserve Bank of Minneapolis (but speaking for himself only), explained why early childhood education is a much better public investment than sports stadiums.

Ranking minority member Rep. Darrell Issa (R-CA) was a bit skeptical.

Issa: Did you also look at physical fitness, health and welfare, aspirations of young people, everything else that goes when they go to one professional baseball game and they say, "I want to be like that. I'm going to join my Pop Warner and I'm going to do this." Did you look at any of the other -- did you apply those same metrics to that?

Rolnick’s response didn’t mention, uh, steroids, but he still knocked it out of the park.

Rolnick (below): Yes, we did. Actu…

Former FCR executive Stuckey aims to cash in on insider info

Develop Don't Destroy Brooklyn points us to a web page for former Forest City Ratner executive Jim Stuckey's latest venture, Verdnat Properties, and questions his commitment to "sustainable, harmonious development."

The more important asset Verdant brings, however, may be the inside track. To quote the company's web site:
With over three decades of proven experience, and relationships with property owners and tenants; brokers and appraisers; architects and attorneys; title companies and accountants; and, lenders and investors – the principals of VERDANT PROPERTIES, LLC™ frequently learn of opportunities to acquire properties long before their competitors, and often times, these assets are never publicly marketed.
(Emphasis added)

Remember, Forest City Ratner was anointed developer of the Metropolitan Transportation Authority's Vanderbilt Yard 18 months before an RFP was issued.

So, would Brooklyn be 2010 or 2011?

A New York Times sports section article on Saturday, headlined By Adding Yi, Nets Hope to Expand Their Market, offered that not-so-credible 2010 date for the Nets' assumed Brooklyn move:
With sizeable Chinese communities in North Jersey and Brooklyn, where the Nets are scheduled to begin playing in 2010, Yi could be the Nets’ marketing answer to the Houston Rockets’ Yao Ming.

Yesterday, a Boston Globe article headlned His next stop, Brooklyn? gave a more realistic date:
While the struggling Knicks are New York City's longtime franchise, the Nets will get a piece of the Big Apple by moving to Brooklyn, probably in 2011. But in two years, don't be surprised if Jay-Z helps bring his buddy James to a franchise that will be attractive to play for by then.

I think 2011 is a more likely best-case scenario. Remember, the Nets are promising only "calendar year 2010," which might just be New Year's Eve.

AY photobloggers Collins, Kinloch get their due

Check out the Brooklyn Review's A Walk Around the Blog to see Adrian Kinloch of Brit in Brooklyn and Tracy Collins of Not Another F*cking Blog talk about their work photographing the Atlantic Yards footprint and responding to Forest City Ratner's surveillance cameras with some counter-surveillance of their own.

Without "citizen journalism" of such high quality, the AY story wouldn't be told.

The Post's Brooklyn Tomorrow advertorial is back

As I wrote last June, Brooklyn Tomorrow, the promotional magazine inserted in the New York Post and the Post-owned Courier-Life chain, is not labeled advertorial though it certainly reads as such. But the latest edition of the annual publication, featuring enthusiastic articles from bylined Courier-Life staffers, certainly helps explain why, despite considerable reason for skepticism, the Post editorial page last week twisted its way to an Atlantic Yards hooray.

The issue includes three pages of advertising from Forest City Ratner, one page for the New Jersey Nets, and a two-page article that is essentially advertorial, mimicking the developer's talking points: While some local critics complain they were not included [in the Community Benefits Agreement], few, if any, were not invted to sit at the table initially in this effort.

Oh, and what about this critique from Bettina Damiani of Good Jobs New York?

Last year's issue

Last year's issue (right) had Atlantic Yards on the cov…

"Brutally weird" block party quietly canceled, as FCR apparently has second thoughts

The "brutally weird" block party scheduled for yesterday--on a to-be-demapped AY footprint block--by Community Benefits Agreement (CBA) signatories was canceled without public explanation yesterday. Apparently Forest City Ratner and its surrogates recognized that 1) it was bad form and 2) block parties usually involve residents celebrating their block, and there weren't any of them. (Image from DDDB.)

Well, there was some largesse distributed. As told to DDDB and to me by an eyewitness, CBA signatory BUILD (Brooklyn United for Innovative Local Development) and Forest City Ratner representatives "were out in front of the [homeless] shelter at 603 Dean handing out pizza, drinks and Nets tote bags to shelter residents." The shelter is on the block just below the block where the party was to be held.

Another eyewitness says the FCR rep acknowledged that the party idea was inappropriate. However, since party planners had put flyers up in the shelter promising food at …

No-property-tax status was supposed to raise the price of the Vanderbilt Yard

There's another obscured benefit for Forest City Ratner in the bid for the Metropolitan Transportation Authority's Vanderbilt Yard. In its September 2005 report on Atlantic Yards, the city's Independent Budget Office (IBO) stated:
IBO’s estimate of new property tax revenue lost to the arena PILOT does not include a loss of property taxes for the MTA land that would be part of the arena building foot print. The city currently receives no tax payment from the MTA for the rail yard because the MTA, like other state entities, is exempt from local property tax. Under the MTA’s Request for Proposals, any developer acquiring the development rights to the site would probably enter into a long-term lease, leaving the MTA in place as the owner. Therefore, the property would likely remain off the city’s tax roll, resulting in no impact on the city budget. Indeed, the MTA has an incentive to make a deal that maintains the tax exemption in order to maximize the price it receives for th…

City says Yankees' PILOTs wouldn't exceed property taxes, but where's the backing data?

Wasn't there a chance the PILOTs (payments in lieu of taxes) used to pay off tax-exempt bonds for the Yankees and Mets stadiums would exceed the foregone real estate taxes and thus run afoul of federal rules? The city's Independent Budget Office certainly thought the annual Yankees PILOT might exceed those taxes.

And I thought that the same cap might pose a problem even if the city and state officials manage to get the feds to allow tax-exempt bonds for the planned Atlantic Yards arena under the lenient "loophole" provided to the Mets and Yankees.

Then again, you have to think that city and state officials would make sure the numbers work out. In fact, as a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department from the New York City Industrial Development Authority (NYC IDA) and the Empire State Development Corporation shows, the estimated tax for the Yankees would be $62.5 million, while the PILOTs would be only $56.7 million. That's room to s…

Gargano flashback: "no taxpayer money will go to build a sports arena"

Develop Don't Destroy Brooklyn points to a 8/23/04 interview with Charles Gargano, then chairman of the Empire State Development Corporation, who seemed definitive that there would be no help for Forest City Ratner's Atlantic Yards arena:
The governor and I have made it clear for nine-plus years that no taxpayer money will go to build a sports arena. We will consider helping with infrastructure improvements, like a platform over the rail yards on the West Side or new subway stations, which helps the public at large.

Direct subsidies to arena

DDDB points to the wide universe of support for the arena, such as support for tax-exempt bonds, and cites much evidence that the arena is a priority, despite Gargano's claim that "we don't care about the arena."

Even looking narrowly at only direct subsidies, Gargano should have known that the city and state committed in the project Memorandum of Understanding to more than infrastructure. According to a 3/4/05 ESDC press rel…

Congressman offers unskeptical endorsement of Zimbalist's dubious AY study

In Congress last year, Andrew Zimbalist's dubious study of Atlantic Yards for Forest City Ratner got a mindless endorsement from the ranking minority member of the Subcommittee on Domestic Policy of the Committee on Oversight and Government Reform of the House of Representatives, even though an expert witness warned that accepting studies that were not peer-reviewed was akin to federal drug regulators embracing reports created by the drug companies themselves.

It was during the 3/29/07 hearing called "Build It and They Will Come: Do Tax Payer-Financed Sports Stadiums, Convention Centers and Hotels Deliver as Promised for America's Cities?"

Subcommittee Chair Rep. Dennis Kucinich (D-OH) had elicited critical testimony from several observers. At one point, asked by Rep. Danny Davis (D-IL) whether there was room for public-private partnerships in sports facility construction, Frank Rashid of the Tiger Stadium Fan Club responded (see p. 61 of this transcript):
I think each …

With Jefferson gone from the Nets, the AY permanent campaign adjusts

Now that Nets forward Richard Jefferson has been traded to Milwaukee for Yi Jianlian and Bobby Simmons, the Nets page on the Atlantic Yards web site has been updated--likely temporarily--to feature one player (Vince Carter) and two owners (Bruce Ratner and Jay-Z). Click to enlarge.

In the previous iteration of the page (below), Jefferson occupied the slot currently held by Jay-Z. Of course, before team leader Jason Kidd was traded to Dallas for Devin Herris, the page featured a Carter/Kidd/Jefferson/Nenad Krstic panorama, plus a shot of Kidd alone.

A new Chinese fan base?

So what does the trade mean? Here's one comment on NetsDaily: This looks like more of a business move than anything else. We’ll make more money as an franchise now because of the chinese fanbase, but we lose a team leader. I’ll agree that RJ wasn’t a great fit with VC, and Yi has some serious potential, but it hurts to see RJ go out like this.

Well, the Nets are offering free Yi jerseys to anyone who buys a season t…

For Ground Zero, Paterson promises timeline candor; for AY, it's the party line

Regarding Ground Zero reconstruction, Gov. David Paterson has expressed skepticism about the professed timetable, and asked for clarifications. Despite reasons to doubt the professed timetable for Atlantic Yards, he has not merely failed to express skepticism, his administration has endorsed the chimerical timetable asserted by developer Forest City Ratner.

Two weeks ago, Paterson wrote to new Port Authority head Christopher Ward:
To this end, I am asking you – in your role as the new Executive Director of the Port Authority – to complete a comprehensive assessment to determine if the current schedules and cost estimates for reconstruction are reliable and achievable. If they are not, I would like an evaluation of what viable alternatives exist to get the project back on track or whether we need to alter our targets to meet the reality on the ground.

Last night, speaking at an event honoring the "Observer 100" in real estate, Paterson reiterated his concern. "We need to fi…

Who spent $219 million on AY? The city and state obscure the issue

In a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department, the New York City Industrial Development Authority and the Empire State Development Corporation (ESDC) argue that the PILOTs (payments in lieu of taxes) plan for arena financing should stand, even though the feds want to change the rules for tax-exempt bonds. (Here's the letter in full.)

Part of the argument is that Atlantic Yards has already proceeded significantly. But on more than one issue, the city and state obfuscate rather than explain. For example, consider this passage about Atlantic Yards spending (click to enlarge):
In order to illustrate the substantial progress that has been made with the Project prior to the issuance of the Proposed Regulations, we have provided the chronology of events set forth below.... Substantial amounts have been spent on the Project: approximately $99 million prior to 2006 (of which $15 million related to the Arena) and approximately $219 million prior to 2007 (of …

Bloomberg's desire to control board members is part of why public authorities reform bill died

Yes, the bill to reform public authorities in the state was derailed by last-minute objections raised by Mayor Mike Bloomberg, drawing a furious reaction from Assemblyman Richard Brodsky, the sponsor.

In a letter to Bloomberg Monday, Brodsky wrote:
We have been working on ways to reform public authorities for five years. The investigations we’ve conducted, often with other Committees of jurisdiction, include the activities of the MTA, the Power Authority, the Javits Operating and Construction Corporations, ESDC, the Long Island Power Authority, the Thruway Authority, the Capital Resources Corporation, The New York City IDA, the Port Authority, and many, many others. What we’ve concluded is that public authorities are making critical decisions about the daily lives of New Yorkers, and are often wildly out of control, sources of unrestrained debt, hosts to repeated incidents of malfeasance and corruption, secretive and unaccountable, and in the end as close to Soviet-style bureaucracies…

City Council Members propose bill that would require EIS-like reports for subsidized projects

A group of City Council members and advocacy groups yesterday announced the introduction of legislation designed to ensure that projects eased by tax breaks and bond financing are accompanied by economic impact reports. Whether such reports, which would resemble mini environmental impact statements (EIS’s), could make a major difference is an inevitable question, but proponents said it’s a start.

Such data would include housing cost impacts; anticipated resident and business displacement; number of jobs to be generated; types of jobs to be generated; wage and salary data; number of employees with health benefits; impact on community infrastructure including the provision of police, fire and emergency medical services, sanitation, water supply, waste water treatment, services provided by the Department of Health and Mental Hygiene, the Health and Hospitals Corporation Corp and privately owned hospitals, public schools and public transportation services.

Yes, it sounds a lot like the EIS’…

Quietly, state board approves NYU's absorption of Polytechnic

Yes, the State Board of Regents, as expected, approved New York University's no-money-down absorption of Brooklyn's Polytechnic University. Yes, the dailies missed the story. Polytech brass are enthused, calling it a "partnership," a term also used by the NYU provost.

Polytech alumni say a group of alumni, former and current trustees and faculty members, independent of the Alumni Association, filed a Petition to stay the vote and remove the Polytechnic Board of Trustees under Education Law 226(4).

Brutally weird: a CBA block party on Pacific Street in the AY footprint

Permits for block parties in the city must be acquired 60 days ahead of time, so let's assume that the Atlantic Yards Community Benefits Agreement BLOCK PARTY! was scheduled well before the Supreme Court decision Monday not to accept the AY eminent domain appeal. Still, the event was not announced until late Monday afternoon.

That's curious. Stranger still, and brutally weird, is the location of the party: Pacific Street between Carlton and Vanderbilt avenues in the AY footprint, opposite the under-demolition Ward Bakery, where a stop-work order exists and where the handful of residents left are, as far as I know, plaintiffs in the eminent domain case or their relatives. As Develop Don't Destroy Brooklyn comments, "Call us crazy but we thought block parties were thrown by PEOPLE LIVING ON THE BLOCK."

In other words, the "community" celebration is on a block scheduled for Phase 2 of the project, without start date or deadline, threatened by "condemnat…

A Stadium Story: eerie echoes, curious contrasts, and cautionary lessons for AY

Remember the battle over the West Side Stadium, that 15-month donnybrook, from March 2004 through June 2005, that dominated the city’s discourse over sports facilities, leaving scant attention for the Atlantic Yards and baseball stadium controversies?

The documentary A Stadium Story, screened in 2006 but not yet in wide release, offers some eerie echoes, curious contrasts, and cautionary lessons for Atlantic Yards watchers. (The film is well worth watching; for now, it’s available for $25 from the official web site, but it should be distributed soon, according to the filmmakers.)

Summary of the battle

The stadium, to be built on Metropolitan Transportation Authority railyards west of Penn Station--the Hudson Yards site--was to serve not only as the home of the New York Jets, to be relocated from the Meadowlands (accessible pretty much only by car), but would be the centerpiece of the city’s bid to host the 2012 Olympics and also, with a retractable roof, be home to trade shows and othe…