Saturday, July 27, 2013

Flashback, 2003, from the Cleveland Scene: "Ratner said Atlantic Yards 'will be almost exclusively privately financed.' The word to watch is 'almost.'"

When the Atlantic Yards plan was unveiled in December 2003, one of the most prescient analyses came not from the local media but from the Cleveland Scene, an alternative weekly in Cleveland, home of Forest City Enterprises, parent of New York's Forest City Enterprises.

The headline was Ratners take on New York: Where the public trough is a tempting buffet. And however much the language seems loaded, well, look how it turned out.

The Scene reported 12/17/03:
It appears that Cleveland's favorite welfare queens, the Ratners, are up to their old tricks, this time in Brooklyn.
Last week, with rapper Jay-Z and New York City Mayor Mike Bloomberg by his side, family scion Bruce Ratner unveiled plans for a new neighborhood of shops and condos, all centered on a basketball arena that, if he has his way, will someday house the New Jersey Nets.
The arena's designer would be Frank Gehry, the famed architect who created Case Western Reserve's Peter B. Lewis Building, remembered for coming in $23 million over budget and for almost killing pedestrians with the long icicles that fall from its curved metal roof.
Mimicking the Ratners' Cleveland convention-center plan ("Gravy Train," December 3), the Brooklyn development would be right around the corner from MetroTech Center, the seven-million-square-foot commercial development under construction by Forest City Ratner Companies, the Ratners' New York affiliate. The project can get off the ground only if the Nets accept Bruce Ratner's $275 million offer to buy the team.
But in a line that drew instant chuckles from the vultures in the New York press corps, Ratner said the project "will be almost exclusively privately financed." The word to watch is "almost."
"That will be a promise to keep an eye on as the project progresses," wrote the New York Sun. Yet it appears that it's already being broken. Bloomberg will allow Ratner to take taxes generated by the development's first phases and reinvest them back into the project. "We're truly very excited, and we hope he wins and he brings the team to Brooklyn," says mayoral spokeswoman Jennifer Falk.
Actually, that TIF (tax increment financing) plan was dropped for a more complicated, and opaque plan for PILOTs (payments in lieu of taxes) to pay off the plan.

Some semi-skepticism

And were "the vultures in the New York press corps" really chuckling?

Actually, most of the coverage was enthusiastic, though the New York Sun, cited in the above piece, admitted skepticism within a generally approving 12/11/03 editorial headlined Building in Brooklyn:
Some of the best news the city has heard in months came yesterday with the disclosure of plans to build a basketball arena and office and residential towers at the intersection of Atlantic and Flatbush avenues in Brooklyn.

Much of the attention, naturally, will be focused on the basketball arena part of the project. About this we would say that if the Nets can be lured to New York City from New Jersey, it would be a good thing for New York City. A basketball-arena would be used for more than 40 home games, unlike a football stadium, which would be used for fewer than 10. Doubts about how this can work can be allayed by the experience of Washington, D.C. There, the move a few years ago of an NBA team to a new arena in downtown Washington from suburban Landover, Md., helped turn a once-shabby district neighborhood into an area that now bustles with fine restaurants and new condominiums.

But the most important part of this project is the scale of the new construction: 2.1 million square feet of office space, about the amount in the Empire State Building, and 4,500 residential units. The reflexive neighborhood groups were already out complaining yesterday about potential traffic and a "land grab." The general concerns about eminent domain laws and their abuse are well founded. But in this case, most of the site is already publicly owned rail yards of the Long Island Rail Road. And the activists opposing the project have gone beyond "nimby," or not in my backyard, to "banana," or build absolutely nothing anywhere near anyone. What they are really opposed to is the kind of economic growth that this project represents.

Worth noting, as well, is developer Bruce Ratner's assertion yesterday that the $2.5 billion project will be financed "almost exclusively" with private funds. That will be a promise to keep an eye on as the project progresses. The plan sketched by Mr. Ratner and the architect Frank Gehry deserves quick clearance from the city and state when it comes to the logistics and approvals necessary. But in a city where residents face the highest combined state and local tax burden in the nation, any tax relief should be distributed equitably to those who pay the most taxes, not on an ad hoc basis by politicians as targeted subsidies to politically powerful developers.

It seems the intersection of Atlantic and Flatbush avenues has been under construction for one reason or another for the past century. For all the construction work and underground improvements made, however, the fruits of the work have been sometimes difficult to detect above ground. It will be a good thing to see some office and residential towers rising in Brooklyn instead of in New Jersey or some city in the Sunbelt.
The Sun was correct that a basketball arena gets used far more than a football stadium, though the difference between Brooklyn and downtown Washington was that nearly everything around the Brooklyn arena site was already gentrifying.

As for scale, well, there's an argument for significant density, and Atlantic Yards opponents ultimately embraced that, via the UNITY plan. But they didn't support Forest City Ratner choosing the scale, with the willingness of the state to override zoning.

And most of the site was not "already publicly owned rail yards"--actually, less than 40% of the site.

As for the "promise to keep an eye on as the project progresses," well, most have taken their eye off that.

It's devilishly difficult to tote up the combined value of direct subsidies, tax breaks, underpriced land, and zoning overrides, but the benefit is easily in the hundreds of millions. It's closer to $1 billion--and possibly more--than to $500 million.

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