Skip to main content

At IDA hearing, Brodsky warns of "complete breakdown of the issuance of public debt"

An array of people, notably Assemblyman Richard Brodsky, testified yesterday at a hearing of the New York City Industrial Development Agency (IDA) on additional tax-exempt bonds for the New York Yankees and New York Mets.

Neil deMause has the highlights in the Village Voice blog, quoting Brodsky: "This event and this vote and this hurried process is only greater evidence of the complete breakdown of the issuance of public debt in New York State."

The IDA is scheduled to vote today. (Here's coverage from the Times and Newsday.)

Good Jobs New York has collected testimony. Michael D.D. White of Noticing New York offers observations on the scene--good government groups, construction workers, Bronx supporters of the Yankees--and his own testimony, questioning the legitimacy of the process and observing:
Financing additional luxuries at the stadiums induces no additional public benefit. It is only a way heap more financial benefit on those already flush with benefit.

Columnist Neil Best of Newsday shrugs, suggesting the tax-exempt bonds are "hardly a handout." (The Daily News, in an editorial, praises the deal.)

"Privately financed"?

Good Jobs New York testified on the issue that led to heated colloquys Wednesday between Brodsky, NYC IDA Chairman Seth Pinsky, and Yankees President Randy Levine:
Despite claims from the city that these projects are “privately financed,” the teams have gotten tax-free financing, grants, tax-breaks, the teams won’t pay rent, and the Yankees got parkland for the new stadium for free. Good Jobs New York estimates taxpayers have already invested over $1 billion for the new Yankee Stadium, and almost half a billion for the Mets’ new stadium.

If these projects were indeed privately financed – as City Hall has relentlessly insisted this week - why did the city, on the Yankees and Mets’ behalf, spend significant time and resources lobbying the Internal Revenue Service to allow the IDA to issue tax-free bonds for the project? Getting special permission from the IRS for a public authority to issue a financial package that consists of tax-exempt bonds, a variety of tax breaks, and significant capital costs to a city agency would fail to meet any definition of a private transaction.


A Times editorial--and another

Oh, and deMause notes a Times editorial yesterday:
Hating on the New York Yankees stadium deal after the fact is the new black. The The New York Times - which called the Yanks and Mets deals "a steal" compared to past city proposals back in 2005 - today calls on its editorial page for the latest round of Yankees bonds to be rejected.

Regarding Atlantic Yards, as I've pointed out, the Times has gone in the other direction, conveniently forgetting that it once opposed $200 million in city and state direct subsidies.

White concludes similarly:
Now all we need is for the Times to get similarly responsible on a bunch of other city development issues. The first priority for their next move? They should take up the issues that affect Forest City Ratner, their real estate partner: the Atlantic Yards megadevelopment.

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.