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Flashback to 2004: Bloomberg asserts project would be on vacant land, rely on private money

It was three years ago, and how things have changed. Mayor Michael Bloomberg, in his weekly radio appearance with WABC’s John Gambling on 1/23/04, addressed the announced sale of the Nets to Bruce Ratner (and other investors) and the prospects for the Atlantic Yards project.

Some key statements were either inaccurate or proven wrong as the project evolved. Notably, Bloomberg called the railyard in the proposed project site "vacant land," promised "an enormous number" of permanent jobs, and suggested that the developer would be responsible for nearly all the project funding.

He also predicted that Atlantic Yards would "have an enormous impact" on the quality of life, but the implication was positive rather than negative, as detractors say, or, as the Empire State Development Corporation's (ESDC) Final Environmental Impact Statement suggests, somewhat mixed.

Also, the mayor agreed that the sports business was a free market, without acknowledging the government's significant intervention into that market.

The discussion starts at about 12:05. I've added boldface in places.

JG: Nets coming to Brooklyn. Looks like it’s going to happen. Is it an absolute done deal yet?

MB: No absolutes. This is a complex business. Number one, today the YankeesNets group….. they have to approve it. Then you’ve got to get the NBA owners, a majority of them, to approve a transfer of ownership and a movement of the team…

Then, we’ve got to find a ways--Bruce Ratner’s got to find a ways--to build this complex in Brooklyn. Like everything else, it’s controversial, I’m sympathetic to people who don’t like something like this moving in to their neighborhood. People whose apartments are going to be replaced, or houses taken away, generally speaking, this guy Ratner is a very responsible developer. If you go back and look at his track record when he developed MetroTech, which made an enormous difference in this city, he treated people very well.


Note how Bloomberg essentially said that the city and the developer were on the same team, nearly a year and a half before the Metropolitan Transportation Authority put the Vanderbilt Yard--some 40% of the proposed site--out for bid.

Vacant land?

MB: People that get a lot of money to move, or better apartments, tend to say, “Oh well, I didn’t think it would be this bad, it’s good, I’m happy to do it.” It’s people whose property isn’t directly impacted, because they still have their property but the neighborhood character changes. In this case, the neighborhood I think will be a lot better. This is a big piece of open land, with railroad tracks. It’s been there for a long time. This is where the Dodgers were going to build a stadium. That’s how long this piece of land has been vacant.

Actually, the Vanderbilt Yard is a working railyard rather than a piece of vacant land, and the Dodgers considered a stadium nearby, across Atlantic Avenue, but not on the railyard. He made the same misstatement at the Barclays Center extravaganza last Thursday.

All upside

MB: This’ll bring something like 4400 new housing units to the city, we need that desperately, and it will replace very few, a hundred housing units, rough numbers. It will bring an enormous number of construction jobs. It will bring an enormous number of jobs to-that will work in the stores, in the offices--

Well, the enormous number of jobs has since been slashed. And the ESDC acknowledges that Atlantic Yards would displace 171 housing units. (Critics predict significant indirect displacement, even more than the ESDC estimates.)

JG: It's a $2.5 billion project.

MB: It’s an enormous thing. It’s the best—it’s one of the best things that could possibly happen to this city. Y’know, the papers will interview people who don’t want it, and I’m sure there will be some court challenges, but you have to build for the future. And there’s been some editorials saying, “Well, I know we gotta do it for the future, but.”

Look, if you listen to every “but,” you would never do anything. “Well, this guy Ratner should do this, that, and the other thing.” He’s gotta raise two-and-a-half billion dollars. He’s gotta build—he should “wait until.” You can’t “wait until;” you do things when there’s an opportunity. This should go through, and the hope is that, within three years, we could have a new arena in Brooklyn.

Did Ratner have to raise the $2.5 billion that was then the project's price tag? Or the current $4 billion price tag? Of course not--subsidies and tax-free bonds would contribute an enormous amount. How much? Public officials won't say. But the naming rights for the arena (arena block?) might pay for half of the arena cost in one swoop.

Bloomberg's quote about "opportunity" was similar to that of Andrew Alper, then president of the New York City Economic Development Corporation, who told City Council in May 2004:
So, they came to us, we did not come to them. And it is not really up to us then to go out and find to try to a better deal.

That's the crux of the eminent domain case--was this a sweetheart deal and does that violate the Kelo decision?

Revenue benefits?

The discussion turned to the Nets, their poor attendance in New Jersey, and the possibility, brought up by Gambling, of them using the Nassau Coliseum. Then Bloomberg returned to the issue of expediency.

MB: Look, Ratner’s going to have to find some ways--he’s going to incur some enormous expenses during this process and if you keep slowing him down, you may think it’s cute and you may have your agenda, but nobody’s going ever going to do anything if you can’t get it going.

This is something where virtually nobody gets hurt, but enormous impact on the quality of life and our ability to have a tax base to educate our kids and pay our cops. It’s really hard to argue that this isn’t a great thing for the city. And yes, not every “I” is dotted and “t” is crossed. You don’t do that in advance.


Exactly how much it might contribute to the tax base remains questionable, but it would be much less than promised just a few months ago.

No city spending?

JG: The city will spend money on this?

MB: Well, we spend--if you build a new building, we have to fix the roads in front of the building. There’s always some expenses. Fundamentally, the answer to your question is: this will be done with private money, and any city monies of any meaningful size will be [corrected] debt issues financed by the extra tax revenues that come from this. So, we’re not going to have to divert money from education, or police or fire or any other part of the city to do this. No. It is private money in that sense.

Well, Bloomberg was apparently referring to tax increment financing (TIF) for the arena as well as the expected general increase in tax revenues. But that was before the city and state each agreed to put in $100 million in cash. And before the city agreed to devote large--though still unspecified--amounts of its allocation of housing bonds to support the residential buildings.

And that's not all. Remember, the city's New York City's Independent Budget Office (IBO) stated, in a September 2005 report:
Special Benefits for the Atlantic Yards Project. Under the MOU, Atlantic Yards would receive several special benefits not available as-of-right to development projects: capital contributions from the city and state, low-cost financing for the arena, extra property tax savings, a low-cost lease, and property obtained using the state’s power of eminent domain.

Free market?

Later in the program (approx. 31:45), a caller from New Jersey brought up the city's effort to attract teams and catalyze new sports facilities.

Caller: When you’re talking about taking Jets and Nets from New Jersey, how are you not hurting anybody?

MB: Well, I suppose that--nobody wants to lose a team, everybody wants to gain a team. The Jets used to play at Shea Stadium, moved to New Jersey, New York got hurt, now they want to come back. The Nets--these teams want to go where the audience will support them.

JG: It’s a free market.

Bloomberg seconded Gambling, apparently unmindful of how team owners seek new facilities to maximize luxury boxes and marketing opportunities.

MB: It’s a free market; they’re privately owned. The Nets have not done well in New Jersey; their parking lot’s half full. Y’know, they’ve not sold out in a long time. The Jets don’t like sharing a stadium. But these are private ventures. The city likes to have economic activity. But the city’s not in the sports business, and shouldn’t be. I’d love to have it come here… In Brooklyn, they’ve never forgiven Walter O’Malley.

JG: And it looks as though that this is going to impact, obviously, the plans that they had for the Nets and Devils over there in Newark, but again, it’s a free market, and that’s the way this one works.

If it were a free market, then, what about the subsidies and the benefits cited by the IBO?

Downtown Brooklyn

Two days later, in his radio address, Bloomberg conflated the Atlantic Yards project and the Downtown Brooklyn rezoning, which did not include the site for the project:
Our administration has an ambitious redevelopment plan for all of Downtown Brooklyn, and we’re making it a reality. The Atlantic Yards project, featuring a stunning new arena for pro basketball, will go a long way toward making Downtown Brooklyn into even more of a place that can’t be beat in the competition for residents, businesses and jobs.

As noted, the city and the authoritative book Neighborhoods of Brooklyn both say Downtown Brooklyn ends before the Atlantic Yards site (except, arguably, for one wedge of land at the northwest tip).

That's not to say that it wouldn't extend Downtown Brooklyn. As Brad Lander of the Pratt Center for Community Development said, "Essentially, the Brooklyn Atlantic Yards plan would extend Downtown Brooklyn much further to the east than most people would say it currently goes." But it isn't Downtown Brooklyn, and wasn't rezoned as such.

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