Skip to main content

Fiscal impact of Atlantic Yards? The city keeps report under wraps

How much in new revenues would Forest City Ratner's Atlantic Yards project bring, and what costs would it pose?

That's the $3.5 billion (and counting) question, but the Bloomberg administration's response is: trust us. The New York City Economic Development Corporation (NYCEDC) won't release the report it's used as a justification for the development.

At some point after 5/4/04--when NYCEDC president Andrew Alper told a City Council committee that the project was expected to have a positive fiscal impact--the agency apparently produced an analysis of the project. A 3/3/05 press release from the mayor's office stated: According to an economic analysis completed earlier this year for the New York City Economic Development Corporation, the net fiscal benefit to the City and State from the Atlantic Yards project is estimated at $1 billion in present value over the next thirty years. (Present value means the value in current dollars.)

The online version of the press release contains a link to the NYCEDC web site, but there's no report to be found.

I queried NYCEDC spokeswoman Janel Patterson: "There's a link to NYCEDC but I couldn't find the analysis on the web site. Can you point me to it, or send me a copy? And, given that the project has changed significantly, has there been, or will there be, a new analysis?"

Her response: "The analysis referred to in the release was an internal analysis and not made public."

Two press releases

Why was a city agency estimating the fiscal impact on the state? As I've pointed out before, there's strong evidence that the mayor's office, in that 3/3/05 press release, wanted to cite an analysis by a government agency rather than rely on one by the developer.

Similar press releases issued virtually simultaneously by the governor's office and the Empire State Development Corporation both relied on Andrew Zimbalist, the developer's paid consultant, for their fiscal projections.

A different NYCEDC analysis?

One analysis by the NYCEDC has surfaced. The document, obtained by Develop Don't Destroy Brooklyn and dated 6/27/05, projected the fiscal impact for the city alone. It calculated a return of $524 million in present value--about half of that $1 billion figure estimated for both the city and state

Despite the date, this analysis had likely been completed several months earlier, since it was based on an earlier configuration of the project. At a City Council hearing 5/26/05, Forest City Ratner announced plans to reduce commercial office space and add market-rate condos. This was not incorporated into the NYCEDC analysis made public.

Did NYCEDC produce a second report, the one Patterson cited as an internal analysis"? Possibly. But the agency might have taken the analysis mentioned above and added calculations regarding the fiscal impact on the state. But that's just speculation until we see the report and its methodology.

Huge flaws

More importantly, the NYCEDC document contains a huge omission: while the agency calculated new tax revenues, it made no attempt to factor in increased costs, such as for public safety, schools, and sanitation. The term "net fiscal benefit" used in the city press release suggests that some costs were acknowledged--maybe they were in the report that's under wraps.

Some costs are calculated in the reports by Zimbalist and one by the Independent Budget Office (IBO), but each of those reports have their flaws. Notably, the 2005 IBO report focused on the arena rather than the project as a whole, citing the "methodological limitations in estimating the fiscal impacts of mixed-use developments."

The Zimbalist reports, issued in 2004 and updated in 2005, have numerous flaws, some of which I've outlined. Tomorrow I'll take a longer look.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

"There is no alternative": DM Glen on de Blasio's affordable housing strategy

As I've written, Mayor Bill de Blasio sure knows how to steer and spin coverage of his affordable housing initiatives.

Indeed, his latest announcement, claiming significant progress, came with a pre-press release op-ed in the New York Daily News and then a friendly photo-op press conference with an understandably grateful--and very lucky--winner of an affordable housing lottery.

To me, though, the most significant quote came from Deputy Mayor Alicia Glen, who, as the Wall Street Journal reported:
said public housing had been “starved” of federal support for years now, leaving the city with fewer ways of creating affordable housing. “Are we relying too heavily on the private sector?” she said. “There is no alternative.” Though Glen was using what she surely sees as a common-sense phrase, it recalls the slogan of a politician with whom I doubt de Blasio identifies: former British Prime Minister Margaret Thatcher, a Conservative who believed in free markets.

It suggests the limits to …