Tuesday, September 08, 2009

An Atlantic Yards question the candidates haven't been asked: what about the Department of Finance's questionable tax assessments in the arena block?

Given the often-uninformed level of discourse about Atlantic Yards, I'm not holding my breath, but there's a significant issue that deserves discussion: the questionable tax assessments in the arena block.

I queried the four Public Advocate candidates--Bill de Blasio, Eric Gioia, Mark Green, and Norman Siegel--last week with the below information, but none offered a response (though Green's campaign asked for more time).

The background: Yankee Stadium

As shown in an after-the-fact investigation by Assemblymember Richard Brodsky, the New York City Department of Finance used questionable practices in assessing the land for the new Yankee Stadium, ensuring that the foregone taxes would be sufficient to generate the PILOTs (payments in lieu of taxes) needed to pay off construction:
F. The Tax Assessment Practices of DOF, For Yankee Stadium And Elsewhere, Need Immediate Independent Review.
"The NYCDOF inflated the assessed value of the new Yankee Stadium despite sworn promises by New York City that it would not. It did so, in all probability, to qualify the Stadium project for tax exemptions. The decisions and actions by DOF with respect to its assessment of the land and facility at Yankee Stadium are disturbing, and may have violated legal requirements. These actions include use of out-of-community comparables, failure to make appropriate adjustments, failure to accurately state the location of comparable parcels,, failure to accurately state the acreage involved, wide disparities in assessed value of land in the Yankee Stadium area, the existence of two other City appraisals of the property at much lower values, uncritical acceptance of information from the Yankees without certification or independent review, failure to exclude non-Stadium costs, and acceptance of unusual costs as part of the facility replacement cost.. The consequence of these actions is an assessed value for the Yankee Stadium project that is inflated by as much as one-third.

An immediate, thorough, and independent review of this assessment, and assessments elsewhere in the Stadium neighborhood, and perhaps elsewhere in the City, is required."

Here's one blatant example: using a small piece of land in Alphabet City to value a much larger site in the Bronx.

The current issue

There's evidence that the same inflation of value has occurred or will occur regarding the assessments for the Atlantic Yards site. The New York City Independent Budget Office brought up the issue in testimony in May at a State Senate oversight hearing on Atlantic Yards:
Relying on this interpretation also depends on the city’s finance department assigning a property tax assessment to the arena which results in a payment in lieu of taxes—supposedly equivalent to a regular property tax bill—large enough to cover the annual debt service. This assessment process for Yankee Stadium proved quite controversial, with the city’s assessment higher than those of several independent appraisers, and the process may prove controversial again at Atlantic Yards. In the case of the Yankees and Mets stadiums, the department indicated what the assessments would be prior to the start of construction. No similar announcement has been made for Atlantic Yards, but it is notable that the land assessments for the parcels under the arena have more than tripled in the last three years.

I looked into the issue and found that, for some properties, the increase was not threefold but 17 or 20 or 34 times.

A Department of Finance official dismissed the issue, telling the Bond Buyer newspaper that all vacant commercial land in the city had gone up 260%. However, the DOF official, Owen Stone, did not return multiple calls and emails I sent, asking for clarification.

The question for the candidates

Is this issue regarding assessments in the Atlantic Yards footprint of concern to you?

If not, why not?

If yes, what should be done, now (by those in office) or after the election? What would you do?

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