Monday, July 11, 2016

Newsday: Ratner seeks $6.2M in tax breaks for Nassau Coliseum project (and what about that no-subsidy pledge?)

So, Newsday had a cover story today, Bruce Ratner seeks $6.2M in tax breaks for complex by Coliseum:
Developer Bruce Ratner is seeking nearly $6.2 million in tax breaks from the Nassau County Industrial Development Agency to build a retail and entertainment complex next to the Nassau Coliseum, according to documents obtained by Newsday.
Ratner, who expects to begin work on the 188,000-square-foot plaza next month, wants $4.92 million in sales tax exemptions during the construction period to help pay for materials, according to a June 13 application to the IDA. He received $4.4 million in tax breaks last year [link] to renovate the arena.
...Ratner also wants a $1.26 million reduction in mortgage recording taxes on the plaza. Nassau imposes a tax of 1.05 percent on the mortgage value on commercial properties.
"Financial assistance on this project is necessary," Ratner said in the application, aaccording to Newsday. Note that Mikhail Prokhorov's Onexim now owns 85% of Nassau Events Center, while Forest City Ratner has 15% and is the lead developer

The Newsday article outlines a potential hot potato, in which labor leaders say Forest City should use union labor for interior construction of the retail, while the developer's spokeswoman says they will--except that if a third-party retailer does the work it's up in the air. It also notes an unresolved lawsuit with former partner Blumenfeld Development Group, which is based in Syosset, regarding the retail development.

What about the subsidy?

Unmentioned was Ratner's public statements to the contrary. "What kind of subsidy will you ultimately be getting to do this?" Ratner was asked in an August 2013 TV interview. "How much is the government going to have to put forward?

"This is one of those opposites," Ratner replied. "We're giving the municipality money, not a nickel from the municipality, all privately financed, all privately done. The county will make lot of money from this. In terms of economic impact and in terms of rent."

I was skeptical, since there'd be tax-exempt bonding. And, of course, a tax break, while not a direct subsidy, is the equivalent of a subsidy.

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