Wednesday, April 15, 2009

ESDC predicts new AY timetable and budget; those should still be questions for the Senate oversight hearing

(This is one in an irregular series of articles about issues that a State Senate committee might address when it holds a hearing on Atlantic Yards.)

The Empire State Development Corporation (ESDC) yesterday indicated that two of the major questions swirling around the Atlantic Yards should be answered: the agency will "soon" go public with both a new construction timetable and a new project budget.

[Update: To clarify, my information came via an email from an ESDC spokeswoman.]

Both could be big news. For nearly two-and-a-half years, at least in court papers, the ESDC has stuck to the ten-year construction schedule announced in the Final Environmental Impact Statement. Last week, ESDC CEO Marisa Lago acknowledged that it could take "decades."

And the ESDC, which announced a $4 billion project budget in December 2006, has since asserted that information about the project budget and cost of the arena is a trade secret. That, however, sets up the possibility that developers and public agencies can announce one set of numbers to the public, then turn around and keep the actual numbers secret.

Closer look

Whatever the new information, the ESDC's performance deserves a closer look from lawmakers, given the tensions inherent in its role to promote business and also evaluate the environmental impact of projects.

Indeed, as Lago's performance last week showed, the ESDC is still boosting Atlantic Yards. Yesterday was another example.

At about 7:50 of yesterday's Brian Lehrer Show, WNYC's Matthew Schuerman reported that Robert Leiber and Lago, the heads of the city and state economic development agencies, were at a breakfast, "basically assuring the New York Building Congress, a construction industry group... that all these projects you hear that are on the rocks--Atlantic Yards, West Side Railyards, Willets Point, Moynihan Station--they're not dead yet; in fact, they're far from dead, they were supposed to take lots of time to build, and we still have plenty of years to go."



Plenty of years to go?

When the Atlantic Yards project was approved in December 2006, it was supposed to take a decade, according to the construction schedule attached to the Final Environmental Impact Statement (FEIS) issued by the Empire State Development Corporation (ESDC).

On 4/30/07, well before the economic downturn, I questioned whether the schedule was a reference or fantasy, pointing out that project landscape architect Laurie Olin said it could take 20 years and that CEO Chuck Ratner of parent company Forest City Enterprises said it could take 15 years.

In court papers last May filed in a case brought by residents of two footprint buildings, however, the ESDC asserted that contractual remedies, which offer no sanction for delays on Phase 2 and give a long leash to the arena (6+ years) and the towers of Phase 1 (12+ years) “do not modify the Project schedule.”

Why exactly the State Funding Agreement and City Funding Agreement, both signed in September 2007 well before the economic downturn, give such a long leash, is worthy of some oversight.

ESDC lawyers called “purported quotations from [Forest City Ratner CEO] Bruce Ratner” regarding project delays “pure hearsay as to ESDC,” and suggested that other statements by Ratner—asserting a ten-year buildout in a Daily News op-ed shed light on claims of delays.

In a court hearing last June, an ESDC lawyer said that Forest City Ratner is required to use “commercially reasonable efforts” to move forward.

Now what?

The ten-year timeline was crucial to public support for the Atlantic Yards project. Within ten years, blight would be removed, 2250 units of affordable housing would be built, eight acres of publicly accessible open space would be provided, and new tax revenues would be available. Even before that, a new arena and railyard were to be built.

But who's in charge? Consider the language from a federal court decision dismissing an eminent domain challenge: "the Project will create..." Or consider the language from a 2006 poll for Crain's New York Business: "the project will provide..."

The Project itself cannot "create" anything. It cannot "provide." 

Required is financing from the developer, investors, and government, as well as government oversight. Required is candor.

Project cost?

The cost of the project is important on several levels. While the price tag--especially for the arena--may have gone up after Atlantic Yards was approved, lowered construction costs should have an impact.

More importantly, a buildout over 20 years or more may require new assumptions and expectations of government assistance. Does the ESDC expect Forest City Ratner to ask for more money?

Arena cost?

The arena, when approved, was supposed to cost $637.2 million. Then it went up to $950 million. As I've written, a significantly less expensive arena--Forest City Ratner reportedly aims to cut the cost in half-- might confirm that Frank Gehry's design has been significantly altered.

And that might cause consternation among the sponsors already signed up to plaster their names on a "landmark" arena.

No comments:

Post a Comment