Skip to main content

What if the public authorities reform bill had passed before the MTA revised the Vanderbilt Yard deal?

Given that Atlantic Yards is both a poster child for the reform of public authorities as well as the great unmentionable, it's worth pausing to consider how the reform bill might have affected the project had it passed months ago.

Short answer: it would've made Mayor Mike Bloomberg sweat as he spent actual city money on the project.

Remember, the bill has passed the state legislature but had provoked opposition from Bloomberg, and thus awaits revision or veto at the hands of Gov. David Paterson.

The mayor particularly objects to a provision that requires public land to be sold at market rates, thus hampering the city and other jurisdictions from pursuing targeted projects. The rebuttal is that the deal could be done at market value, and the city, should it want to push for such things as affordable housing, could then give the developer a grant.

The Vanderbilt Yard deal

In June, we learned how the MTA, following the lead of Paterson and (especially) Bloomberg, agreed to revise the deal for the Vanderbilt Yard with Forest City Ratner. Instead of paying the $100 million promised for the 8.5-acre railyard, FCR would pay $20 million for the parcel it needs for the arena block, less than three acres, and pay the rest of the $80 million over 22 years at a generous 6.5% interest rate.

Also, the developer would save more than $100 million, given that the MTA agreed to a smaller, not larger, replacement railyard. The temporary railyard would linger longer.

All told, Forest City Ratner would save well over $100 million and the MTA would be deprived of $80 million it needed for its capital plan, which faces huge deficits.

Moreover, by accepting a smaller railyard and a longer-lasting temporary yard, the MTA would lose a significant amount of value--more than $100 million--that could be represented by improved service.

If reform had been in place

So, what if the board members had a strongly enforceable fiduciary duty--as opposed to the weaker one imposed by the MTA bailout bill--and felt compelled not to budge from the original $100 million deal, which itself was a compromise?

(Remember, the land was appraised at $214.5 million with the cost of a replacement railyard factored in, and rival Extell bid $150 million, though it was not allowed to flesh out its bid. Forest City argued that the value of its bid was much larger than the appraisal, though it's claims were questionable.)

Mayor Bloomberg, who wants the project to go forward--because of his belief in megaprojects, the desire to cut a ribbon, love for pro sports, coziness with the real estate industry?--would've had to spend some political capital and actual capital.

He could have done so. After all, he's the guy who put an additional $105 million in city funds into the project in 2007. The City Council doesn't have a line item veto.

Bloomberg coming clean

But Bloomberg would've had to have been more open in finding this new money--at least $100 million. He could have cut library hours. He could have continued to cut the starting salaries of cops. He could've closed health centers here and there.

Whatever he did, though, he would've had to tell us, and done so in the face of Independent Budget Office testimony--at the May 29 state Senate oversight hearing--that the arena was a money-loser for the city.

He would've had to confront his statement in May that no more city subsidies were available. And elected officials would've quoted Bruce Ratner, who told the Brooklyn Paper that "We don't need anything more."

On June 24, Gene Russianoff of the Straphangers Campaign told the MTA board, "“I think a rush to judgment here will further undermine the public’s faith in your credibility."

"I’m here to discuss your duty not to squander your assets," said Assemblyman Jim Brennan.

The implication was that the board was making a decision but burying the impact.

In city government, a larger number of officials would have been able to point to the cost of the deal and some would have had the independence to criticize it for its impact on other services.

Forest City Ratner still might have gotten what it wanted. But the political cost to the mayor would have been much, much higher. Still, isn't he supposed to take the heat, not the unelected MTA board members?

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…