Sunday, May 31, 2009

Daily News to MTA: compromise with Ratner (and ignore all else)

The New York Daily News, ostensibly the newspaper of the city's working class, is owned by a real estate developer and has maintained blinkered support for Atlantic Yards, today editorializing that the Metropolitan Transportation Authority should compromise on a deal with Forest City Ratner.

In an editorial headlined Net the Nets: New York must get behind a new basketball arena for Brooklyn, the newspaper urges the MTA to be "flexible... in getting the deal done."

Missing reality

While the Daily News cites an extension on the Hudson Yards deal as a precedent, the newspaper neglects to point out that an adaptation to changing conditions might also require a new assessment of costs, benefits, and subsidies, as City Council candidate Brad Lander, among others, points out.

After all, if the Independent Budget Office now thinks that the arena would be a money-loser for the city in terms of new tax revenue, maybe "netting the Nets" deserves a bit of reconsideration.

Fair process?

The Daily News suggests that the MTA would get "revenue it would otherwise lose." 

Remember, Forest City Ratner's proposed payment would be even less than half the appraised value--and stretched over a longer period of time. Rival Extell bid $150 million, rather than Ratner's $50 million, later upped to $100 million. 

One reason for the MTA's willingness to negotiate exclusively with FCR was the developer's promise of a new railyard--apparently more elaborate than the one incorporated in Extell's bid. But now FCR promises to scale that back too.

Given that only one bidder emerged after an RFP was issued 18 months after Forest City Ratner was anointed the site, can we assume there was fair competition for what Chuck Ratner, CEO of parent Forest City Enterprises, calls a "great piece of real estate"?

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