Friday, December 18, 2009

Master closing scheduled for December 23, but ESDC won't release deal documents (penalties, incentives) for at least a week

A master closing involving the Metropolitan Transportation Authority, Empire State Development Corporation (ESDC), and developer Forest City Ratner is expected to be held next Wednesday, December 23.

But the ESDC tells me that the documents won't be made publicly available until a week or two after the closing.

That's backwards, isn't it?

Fine print important

Keep in mind that contract documents, rather than the more aspirational and vague Final Environmental Impact Statement and the Modified General Project Plan, are where we get to see the real oversight of the project.

The State Funding Agreement, which was signed in September 2007 but didn't surface until March 2008, gave FCR up to a dozen years (after the delivery of property by eminent domain) to build Phase 1 of the project without penalty.

And the City Funding Agreement, which also was signed in September 2007 but wasn't revealed until April 2008, allowed the developer to build a project 44% smaller than planned.

Smaller, slower project still allowed

Meanwhile, documents distributed to the ESDC board when it re-approved Atlantic Yards in September show that the developer can build only 5,145,000 square feet, or a little less than 65% of 7,961,000 square feet, which is the size approved in the Modified General Project Plan.

In an ESDC board memo distributed September 17, the interim leases for the arena block and Phase 2 were described as lasting up to 12 years and 25 years.

The project is officially supposed to take a decade and the ESDC's economic benefit projections are based on a ten-year buildout. (No alternative timetable was considered.)

What kind of oversight?

In a June 2008 court hearing last, an ESDC lawyer said that Forest City Ratner is required to use “commercially reasonable efforts” to move forward.

Similarly, in the pending litigation challenging the ESDC's September approval of the 2009 MGPP, the ESDC states (right; click to enlarge) that a Development Agreement, still under negotiation, would not permit Forest City to construct the project without including the required affordable housing.

But the affordable housing is dependent on subsidies, so shouldn't the public and elected officials see what the Development Agreement says about that obligation, and shouldn't we see that before it's signed?

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