tag:blogger.com,1999:blog-20743459.post6171959596148792951..comments2024-03-28T05:19:17.215-04:00Comments on Atlantic Yards/Pacific Park Report: At Assembly hearing, Brodsky questions Yankees’ deal; more AY subsidies hintedNorman Oderhttp://www.blogger.com/profile/07618087999719667586noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-20743459.post-66690834000791951412008-07-03T18:25:00.000-04:002008-07-03T18:25:00.000-04:00I suggested in an earlier comment that while Charl...I suggested in an earlier comment that while Charles Bagli reported recently that Ratner said he ‘hoped’ to issue $800 million in tax-exempt bonds for the Atlantic Yards arena we should not presume to believe that we know how much subsidy Ratner is after or that the bonds will not be in a higher amount, $950 million or an amount still higher than that. (See: http://atlanticyardsreport.blogspot.com/2008/06/fcr-consultant-zimbalist-adds-millions.html)<BR/><BR/>(Whatever the amount of the tax-exempt bonds, the amount of the total subsidies for the arena will be still higher than that.)<BR/><BR/>Here in this post is an example of what I was talking about- The strategy is to pursue the IRS loophole and then reveal the amount of the funds that will pass through that loophole after-the-fact. (Why am I thinking of a camel going through the eye of a needle?) That’s exactly what I was talking about. Here it is the strategy admittedly being taken by the ESDC and the Yankees but I was noting how you can readily expect that it will be Ratner’s strategy: he is in exactly the same situation pursuing the same loophole. Taking this a step further, it is a strategy that applies generally to Ratner’s pursuit of subsidy. Don’t let people know how much you are collecting up-front at the public decision-making stage and then cash in for much more than people were expecting later.<BR/><BR/>Today there was a press conference held by Paul Newell who is running to replace Shelly Silver representing the 64th District in the State Assembly. The issue is the way that Ratner blackmailed Manhattan’s Community Board 1 into giving Ratner additional subsidy for his Beekman Street tower. (See: http://www.downtownexpress.com/de_269/cb1approvesratners.html and Wednesday, July 02, 2008 “Does Beekman “blackmail” presage AY subsidy push?” http://atlanticyardsreport.blogspot.com/2008/07/does-beekman-blackmail-presage-ay.html)<BR/><BR/>The Beekman Street tower, also designed by Frank Gehry (is there an effort afoot to promote Gehry?) is being subsidized with tax-exempt “Liberty Bonds.” That tax-exempt bonds are going to a project without affordable units can raise objections. HDC used the last of its allocation of Liberty Bonds to finance the Beekman. The 76-story Beekman tower consists of 904 luxury units in a prime location. (By the Housing Development Corporation’s math about $6 million in fees will be generated by the development: That is either about 18 apartment units or, again using HDC math, could result in the funding of perhaps 89 HDC assisted units other locations under other programs.) Interestingly, this is the second Gehry designed project to be financed with specially allocated Liberty Bonds. Liberty Bonds are a special federal benefit intended to help the downtown Manhattan recover from 9/11. Liberty Bonds were used to finance the Gehry Building across from Chelsea Piers on West Street which many of us know as his “dirty iceberg” building.<BR/><BR/>Tax-exempt bonds don’t usually go to projects without affordable housing. The tax code does not require affordable housing in the case of Liberty Bond financing but public agencies have their public purposes and Liberty Bond financed projects sometimes include affordable housing as a result. Possible objections to the use of Liberty Bonds to finance the Ratner’s Beekman project may have been assuaged when the public was told that pre-K-8 school would be included in the project. The question must be asked however whether public funding of a school in the Ratner building is a net gain for the public or whether putting Ratner first in line for school construction funding simply adds to his take home. It must be asked whether the funding could have produced a better school faster and more cheaply had the funds been used elsewhere instead of burnishing the public purpose aura of the 76-story tower. These are the kind of questions that Paul Newell has raised.<BR/><BR/>Whether public officials made the the right decision is affected by the fact that, after construction began with subsidized funding and approvals already given, Ratner threatened to stop building the school unless more subsidies were granted. According to Forest City Ratner’s executive president MaryAnne Gilmartin,“Work would certainly stop on [the] site and then we would have delays.”<BR/><BR/>Shelly Silver whom Paul Newell is running against carelessly set us up for the same disaster of after-the-fact subsidy blackmail at Atlantic Yards by constituting Ratner as the theoretical monopoly-developer of 22 acres before the project is defined or its public benefit is known. In te case of Atlantic Yard we are talking about blackmailing subsidies with huge total sums involved- $2-3 billion directed away form other projects.<BR/><BR/>_ _ _ _ _ _<BR/><BR/>In this post, Pinsky misleadingly analogizes assisting the Yankees (or a Ratner arena) to assisting IBM! What kind of assistance would IBM ever be given in which it would pay zero rent and zero property taxes and be given a slew of additional subsidies. And that ties in with the jobs that might be provided.- See below-<BR/><BR/>_ _ _ _ _ _<BR/><BR/>This post mentions that there will be 140 permanent jobs at the stadium. Obviously the question is how many jobs will be provided at the NEW (more efficient?) stadium versus the OLD- So I commend to everyone the DDDB post on this that calculates a net gain of 36 permanent jobs. (See: http://dddb.net/php/latestnews_Linked.php?id=1547)<BR/><BR/>Michael D. D. White <BR/>Noticing New YorkMDDWhttps://www.blogger.com/profile/16693635186364315879noreply@blogger.com