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As master closing proceeds, with filing of condemnation, Perkins says governor's response unacceptable; is lawsuit coming?

No one has a written statement responding to questions raised by state Senator Bill Perkins about irregularities in the issuance of arena bonds, but the Empire State Development Corporation (ESDC) yesterday said it expected the Atlantic Yards project to proceed through final approvals today, with the final contracts signed and the eminent domain process to begin in earnest.

"We anticipate the Master Closing to happen tomorrow," spokeswoman Elizabeth Mitchell said yesterday in an email message. "It will include the bond closing, deposit of the funds and real estate documents in escrow, and the filing of the condemnation petition. ESDC expects possession of the title on or near February 1st, 2010."

"We are going to continue to demand that there is going to be accountability and transparency with this project," Perkins said. "We think it’s clearly in violation of the type of scrutiny that is required by law… I know that a lawsuit is being considered." But he didn't say what role he might play in such a lawsuit or who might be plaintiffs.

The issues

Perkins had suggested that the Brooklyn Arena Local Development Corporation (BALDC) was formed by the ESDC as a vehicle of the Job Development Authority (JDA) to avoid scrutiny by the Public Authorities Control Board (PACB); rather, an ESDC subsidiary would have had to go through the PACB, and that would have delayed the arena bonds, possibly beyond the end-of-year deadline for a crucial tax exemption.

Perkins, who led the Senate push for public authority reform legislation championed by Assemblyman Richard Brodsky, also contended that the BALDC did not deserve a tax exemption.

State response

Mitchell said questions about Perkins’ letter should go to Gov. David Paterson’s press office. I contacted spokeswoman Marissa Shorenstein, who said that the governor had responded to me Saturday.

I noted that his response was off-the-cuff, and suggested that a more formal response was in order. “The Governor’s Counsel has reviewed Senator Perkins’ letter regarding Atlantic Yards and does not agree with Senator Perkins’ analysis,” she responded.

Perkins: not satisfied

I spoke yesterday with Perkins, who said he’d spoken with Peter Kiernan, Paterson's Counsel, on Monday.

“I asked him, as per our prior conversation on Friday, what he came up with," Perkins recalled. "And he said 'We’re satisfied with what we got from ESDC and others.' I said, 'Well, what does that mean?' He said, "It’s a creation of JDA.' So I said, 'OK, Is that a subsidiary?' He says, 'No, it’s a creation.' I say, 'What does that mean? Because that sounds like a new word in the context of the conversation… because you said at first it was a subsidiary.'"

That means, Perkins said, that the governor's office believes that the BALDC is not subject to the PACB, which includes scrutiny by the state Comptroller's office and a unanimous vote by the governor, Assembly Speaker, and Senate Majority Leader.

And that's a "violation of the spirit of the [public authority] reforms that we just signed into law," Perkins said. "And obviously it is not the way in which the people expect us to do business."

"[Kiernan] said, well, that’s his answer, that’s what he got," Perkins recalled.

"I found it to be unacceptable, because, as I said, it seems to have been a creation to avoid the opportunity to scrutinize the financing," Perkins said. "Usually, you don’t hide unless you have something to hide. Why are we being so exotic about the financing? It’s not being subject to the kind of scrutiny that the legislation that we just passed was intended to provide."

"I didn’t ask for a written response," Perkins said. "At that point, it was clear to me that what he said to me was going to be no different than what he would write me."

What next?

Perkins said he'd ask the Attorney General and Comptroller to investigate, because "that effort to circumvent the PACB was an effort to circumvent the Comptroller and help affirm that it was done right."

"We'll see what other levels of government might play a role," he said. "We obviously are looking into the subpoena of documents. The problem here is: the extended effort on their part to avoid scrutiny is very suspicious. I don't want to really be playing cop on these projects, but if they compel us... especially because of the law we just passed. It basically declared the days of shadow government are over. The governor proudly signed the bill."

"It has definitely given us food for consideration, as we move in the direction of legislative reforms on eminent domain," he added. "We're not anti-development, we just want it to be in accordance with the values of the democracy we're in. Clearly, they are raising the suspicions, not us."


  1. Classic politicon answer -- Gov. Paterson's Esq., Kiernan, to Sen. Perkins re. determining the DNA of BALDC, bastard-child-of-the-ESDC. Acc. Kiernan, BALDC is neither an ESDC nor a JDA "subsidiary"? No! BALDC is a JDA "creation." How conveniently Orwellian -- a full 25 years AFTER 1984. Creationism: alive & well in Gov. Paterson's New York.
    -- Patti Hagan


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