Friday, November 18, 2011

Learning from Atlantic Yards (?): city will no longer "routinely sweeten deals for developers" after selection

From Crain's New York Business Insider, today:
City's Tech Campus Leverage

The Bloomberg administration believes that the new way it negotiates deals will produce a better tech campus project for the city. In the past, the city would routinely sweeten deals for developers or have projects die, because bidders were allowed to negotiate terms after being selected and praised at a press conference. No more. “We keep multiple horses in the race until we reach an actual deal,” an administration source said. “We actually make our counterparties bid on the contract document itself and mark it up. And that's part of our evaluation.” With skin in the game, the source added, “if [bidders] walk away or try to kill the deal, they have something to lose.”
(Emphasis added)

With Atlantic Yards, the city and state both anointed Forest City Ratner as the developer before the public process, including the bidding for the key piece of public property--the MTA's Vanderbilt Yard--began.

And Forest City Ratner, after a Memorandum of Understanding was signed with the city and state, then changed the deal, getting more city subsidies in 2007.

In 2009, Forest City renegotiated settled deals with the MTA and the Empire State Development Corporation.

After that was accomplished, FCR brought in Russian billionaire Mikhail Prokhorov as majority owner of the Nets and minority owner of the arena holding company, thus allowing public assistance to flow to an "oligarch of our own."

In 2011, the modular plan emerged.

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