Thursday, June 04, 2009

Daily News follows up on IBO revelation; FCR stonewalls, NYC EDC repeats claim of cost-benefit analysis

The New York Daily News, which missed the Independent Budget Office (IBO) revelation Friday that the area would be a money-loser for the city, does the right thing and follows up today, in an article headlined Study shows Atlantic Yards NBA arena project could cost city big-time. The IBO's calculations derive mainly from a doubling of city subsidies.

The responses the newspaper got were not very helpful:
"We are currently in the process of reviewing the IBO's assertions as to the economic benefits of Atlantic Yards," said Bruce Bender, an executive vice president of governmental affairs for Ratner.
"We will not comment further until we have had sufficient time to review them."


Note that Bender called the IBO's conclusions "assertions" but Forest City Ratner calls the previous report by the IBO a "study."

NYC EDC response

As for the New York City Economic Development Corporation, it repeated the argument it made to WNYC:
...by only analyzing the arena - and not the 16 residential and commercial towers also proposed for the site - the IBO had released inconclusive information.
"In light of new conditions, the city is updating a cost-benefit analysis, and any decisions related to the project will be informed by this revised analysis with the goal of ensuring a significant net positive fiscal impact to the city," said EDC spokesman David Lombino.


Well, there's little evidence the rest of the project will be built in a timely fashion, if ever, so the arena is a legitimate, if incomplete, subset, even though Lombino is correct in suggesting there should be a full analysis. 

But there's no evidence the city has done a real cost-benefit analysis as opposed to just adding up benefits.

Arena revenues need adjustment

The studies completed so far--by the IBO, NYC EDC, Forest City Ratner consultant Andrew Zimbalist--take as a given that there would be a certain quota of events at the arena. However, as Jung Kim and Gustav Peebles pointed out in 2004, those conclusions depend on the closing of the Meadowlands arena and no new arena in Newark.

And a new Newark arena opened in 2007.

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