Thursday, March 04, 2010

The ESDC's dubious delays: the release of master closing documents and the claim that time doesn't affect AY benefits

The Empire State Development Corporation (ESDC) has said a lot of questionable things about the Atlantic Yards project, but two of them deserve another look, given the events of the week.

Both were highlighted at the BrooklynSpeaks press conference Tuesday.

They are:
  • the impact of delay on Atlantic Yards project benefits
  • the delay in releasing master closing documents
Pace of benefits

In Supreme Court Justice Abraham Gerges's decision Monday approving condemnation of properties for the Atlantic Yards project, the judge failed to reject the state's assertion, "Whatever the pace may be for the delivery of the many public benefits of the Project, the nature of those benefits remains the same. "

Really? As BrooklynSpeaks' Gib Veconi pointed out, a delay in delivering affordable housing makes a big difference.

And, to pick a non-AY example, doesn't the nature of benefits change when you get a structured settlement--annuity payments, at a discount--in place of a lump sum? Isn't that why companies now buy structured settlements?

Master closing documents

Also, as BrooklynSpeaks' Jo Anne Simon pointed out, it was quite questionable that the ESDC didn't release the Atlantic Yards master closing documents--which actually govern the project, rather than the more aspirational 2009 Modified General Project Plan (MGPP)--until January 25.

That was six days after a hearing in a case challenging the MGPP was heard in court.

It was also about three weeks after the ESDC told me the documents would be made available.

At left are the essential elements of an email exchange I had with ESDC spokeswoman Elizabeth Mitchell in mid-December. (The second and third elements in bold have been added for clarity.)

She said the document(s) would not be made available "until a week or two after the closing." That didn't happen.

Impact of delay

The case challenging the MGPP questions the legitimacy of the claimed ten-year timetable to build the project.

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.

But the ESDC's economic benefit projections and affordable housing projects are based on a ten-year buildout. (No alternative timetable was considered.)

Did the master closing documents confirm the timetables in the MGPP or the board memo? The memo.

Was that information revealed in court? No--but it should have been.

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