Obscure city bond program set to offer Ratner tax-exempt re-financing for Atlantic Terminal office tower; largest in Brooklyn
A key player in Mayor de Blasio's drive to lure the Democratic convention to Brooklyn is seeking $90 million in tax-free bonds to refinance one of his already-subsidized properties.The public hearing is at 10 am today in Lower Manhattan, and a vote is scheduled next Tuesday.
Bruce Ratner - who developed the Barclays Center where de Blasio hopes the convention would be held - requested the city-backed subsidy from a quasi-governmental agency controlled by the mayor.
If approved, the tax-break will cost the city general fund nearly $1 million in tax revenue and create not a single new job. A hearing is set for Thursday.
Ratner and Maryanne Gilmartin, CEO of his firm, Forest City Ratner, are both members of a committee of movers and shakers de Blasio formed two months ago to raise money for the Democratic convention bid.
...Mayoral spokesman Marti Adams said the deal will be a wash for taxpayers because Ratner will pay a fee to handle the financing. Ratner officials put the fee at $963,000. The money goes to the quasi-governmental Economic Development Corp., not the city’s general fund.
de Blasio's spokeswoman told the Daily News, "To suggest that politics are at play here is absolutely baseless. There are strict eligibility requirements for projects financed through BuildNYC, requirements which are long-established and are rooted in federal tax codes, not politics."
But at the same time, program guidelines state:
All Build NYC benefits are discretionary. Selection considerations include, but are not limited to, need for financial assistance and the impact of the proposed project on New York City’s economy.BUILD NYC is formerly New York City Capital Resource Corporation (NYCCRC) , which has this rather malleable mission statement:
The mission of the New York City Capital Resources Corporation (NYCCRC) is to “encourage community and economic development and job creation and retention throughout New York City by providing lower-cost financing programs to qualified not-for-profit institutions and manufacturing, industrial, and other businesses for their eligible capital projects.”The Brooklyn context
Here's a list of BUILD NYC projects in Brooklyn, with projected jobs added:
- $15 million to Wythe Hotel (33)
- $10 million to Poly Prep Country Day School (0)
- $6 million to United Cerebral Palsy (0)
- $48 million to Cobble Hill Health Center (0)
- $8 million to Mary McDowell Friends School (10)
- $10 million to Brooklyn Heights Montessori School (4)
- $20 million to Albee Retail Development (68)
- $9 million to SCO Family of Services (0)
The Wall Street Journal, in Firm of de Blasio Ally in Line to Get a Break, offers context, noting that BUILD NYC has authorized bond financing for only three for-profit firms among 24 projects under de Blasio, and only two of 23 last year under Bloomberg:
No one testified Thursday at a public hearing on the deal. The corporation’s 15-member board is scheduled to vote on whether to approve the deal next week. Comptroller Scott Stringer, one of the few members of the board whose appointment isn’t connected to the mayor, is still reviewing the project, a spokesman said.Rest assured, the federal hit is much larger.
...For New York state, the transaction would result in an estimated loss of $3.4 million in forgone tax revenue on interest earned by bondholders over the next 25 years. City officials said they couldn’t calculate the loss in income to the federal government.
The article ends oddly with this quote:
“This is the way in which business is done in New York City with people who have a close relationship with the mayor,” Mr. [Dick] Dadey [of Citizens Union] said. But without evidence that there’s a “quid pro quo,” he said, there’s every reason to believe it’s a “merit-based decision.”