Saturday, December 12, 2009

Public authorities reform bill signed; why is Assemblyman Brodsky not mentioning the BALDC?

From a press release from Assemblyman Richard Brodsky, who spearheaded the reform of public authorities:
"Over the past decade the Legislature and the Governor unintentionally created a shadow government, a fourth branch outside the control of our democratic institutions. The result was over 700 Soviet style bureaucracies. They were often effective, but more often ineffective, corrupt, and simply out of control. People who used the MTA, the Thruway Authority, NYPA, or LIPA, more and more were suffering the consequences of secretive and often politically motivated decision making. With one stroke of the pen, Governor Paterson finalizes a reform effort led by the legislature. We’ve adopted new ideas, incorporated existing ideas and created the most sweeping reform of Albany institutions in the last half century. Two fundamental messages flow from this success. One, authorities can be made to bend to the people’s will, and two, real reform that affects the daily lives of people is possible. We will continue to look at other reforms of state government, and expect some of the same kinds of successes.”
From a New York Times article headlined Paterson Signs Bill to Rein in State’s Free-Spending Public Authorities:
Mr. Brodsky, who spent months battling New York City officials over the legality of public financing for the new Yankee Stadium, said that if the law had been in effect, it would have forced far more transparency on city officials as they negotiated the Yankees deal.

“Three billion dollars in taxpayer-backed debt was issued by 12 anonymous people who were essentially doing the bidding of the mayor,” Mr. Brodsky said, referring to the board of the New York City Industrial Development Agency, which issued the bonds on behalf of the Yankees, the wealthiest team in baseball.
Well, it might have forced more transparency, but it's a questionable whether it's taxpayer-backed debt. Formally, it's not; the bonds for Yankee Stadium are non-recourse bonds, backed only by the revenue or property behind it.

What about the BALDC?

So too are the $500 million in tax-exempt bonds issued--and being sold right now--by the Brooklyn Arena Local Development Corporation (BALDC).

Except BALDC officials wouldn't rule out a state bailout, only saying that it was speculation. Nicole Gelinas of the Manhattan Institute has written:
Ahead of any bond sale, Gov. Paterson and Mayor Bloomberg should make it crystal-clear, publicly and to potential investors, that no New York State or City entity will step in to make up for any shortfall in Atlantic Yards’s revenues, even if it means a bond default.
Brodsky, however, has remained far more quiet about Atlantic Yards.

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