Atlantic Yards/Pacific Park Report

Sports Stadiums Are Monuments to the Poverty of Our Ambitions , New York Times columnist Binyamin Appelbaum wrote May 28: People who say that the United States can’t build anything anymore must not be sports fans. Barely a year goes by without the debut of a sparkling new stadium or arena, often in the very cities where it’s most difficult to build almost anything else. A $2.3 billion baseball stadium in the Bronx. A 70,000-seat football stadium in the middle of Los Angeles County. A basketball arena on the San Francisco waterfront. The latest example, announced last month by the mayor of Washington, D.C., is a $3.8 billion plan to build a stadium for the local football team, the Washington Commanders, on 180 acres of public land just two miles from the Capitol. His argument was framed, in part, as a focus on "abundance," the new buzzword regarding Democrats' failure to build housing and public works. It's a flawed argument; Washington, DC, does build a lot of housing...

Update: By trading DeAndre Jordan, they'll save $47 million in luxury taxes. The Brooklyn Nets are leading contenders to win the NBA championship in the 2021-22 season, and owner (er, "governor") Joe Tsai has opened up the payroll, presumably with the expectation that a winning team will reap new revenues. In Hoopshype (h/t NetsDaily ), Yossi Gozlan 8/27/21 wrote  The 2021-22 season will have the largest luxury tax payments ever , noting that seven teams–Brooklyn, Golden State, Los Angeles Clippers, Los Angeles Lakers, Milwaukee, Philadelphia and Utah–are well over the NBA's "luxury tax" and, by next July, are expected to pay a combined $544 million to distribute to the 23 teams with payrolls under the threshold. Golden State Warriors, with a payroll of $177.9 million, a luxury tax payment of $184 million for a total of $362 million, are number one, because they have a "repeater" tax based on payments over three of the last four seasons. About the...

De Blasio wants Madison Square Garden, other sports venues to pay more taxes , the New York Post reported yesterday, as did FoxBusiness, in De Blasio says Madison Square Garden, other NYC sports venues should pay more taxes . However, as WBAI producer Jillian Jonas, who raised the question during the mayor's press conference yesterday, commented when she circulated the exchange via email, "Pretty certain the answer is no." After all, the famously underinformed mayor said that, since he hadn't seen the 9/3/20 letter circulated by nine Council Members raising the issue, he was speaking "broadly," without knowledge of the legal specifics. Still, de Blasio's surely right that sports franchises have "gained incredible value," and part of that relates to their location in the world's media capital, so there's a good case--as was made by Slate after Mikhail Prokhorov sold the Brooklyn Nets to Joe Tsai--that some of that value increase ...

A May 2020 Fiscal Brief from the New York City Independent Budget Office, focusing on the Executive Budget, warns Tumbling Tax Revenues, Shrinking Reserves, Growing Budget Gaps: New York City Faces Substantial Fiscal Challenges in the Weeks and Months Ahead . It surely has gotten worse--with the coronavirus crisis causing increased unemployment and hardship, compounded by rising crime and social distrust, with the police brutality protests further exposing fault lines. Below I pasted in some verbatim text regarding real estate and general risks, with emphases and commentary added. The bottom line is that the future is ominous. What's interesting is that projects like Atlantic Yards/Pacific Park seems to be building into an optimistic future, "We are hopeful there will be a vaccine and this will be resolved by the time buildings are open," said Amir Stein, a representative of TF Cornerstone, builder of B12 and B13, at the most Quality of Life meeting in June. La...

The sunny and (I believe) outlandish estimate by Nets/arena CEO David Levy that Barclays will host 285 a year got me thinking about another, even more dubious set of numbers. Remember this 10/1/13 Daily News headline,  Barclays Center scores: City says arena generated $14 million in tax revenues in its first year ? I was  skeptical , since the New York City Economic Development Corporation is an arm of the mayor's office, and its  previous studies  of Atlantic Yards had been rather self-serving, But I didn't have the data and context at the time to refute it. Which I do below. The claims From the article: The $14 million in tax revenues includes sales tax associated with purchases inside and outside the sports and entertainment complex, as well as income tax generated by Barclays Center employees and the Brooklyn Nets. Forest City Ratner executive chairman Bruce Ratner called the numbers confirmation that the city and state's investment in the Barclay...

Crain's New York Business on 2/4/15 published  Jehovah's Witnesses saved $368 million in real estate taxes over the past 12 years , subheaded "Downtown Brooklyn Partnership [DBP] ups its pressure on the tax-exempt organization to donate $50 million." From the article: The study looked at the Witnesses’ Brooklyn portfolio of 37 properties concentrated in and around Brooklyn Heights and Dumbo. As a religious organization, the group is exempt from paying taxes. The analysis estimated that its property taxes would have totaled $138.6 million since 2006, while transfer and capital gains taxes for 21 of its sites sold since 2004 would have added up to about $230 million. Reed called that a conservative estimate, but said it shows the magnitude of the Witnesses' profits and the money that otherwise would have gone to taxpayers. The DBP certainly has an argument.Generally speaking, tax exemptions for religious and other institutions deserve questions. More specifical...

Talk about service. Though the end of September is neither the fiscal year nor the calendar year, New York City officials have estimated that the Barclays Center is an economic hit. And the arena's favorite (and partner) newspaper, the New York Daily News, has the scoop, in  Barclays Center scores: City says arena generated $14 million in tax revenues in its first year: Arena's direct output in its first year hits $145 million The Barclays Center has generated an estimated $14 million in tax revenues in its first year, city officials told the Daily News, providing the first tally of the $1 billion arena's contribution to the city's offers. The estimates, which come from the New York City Economic Development Corp., are based on data provided by Barclays Center developer Forest City Ratner. Overall, the direct output from the 18,200 seat arena, which just celebrated its first year anniversary and in its first year became the country's No.1 concert venue, has been...

The watchdog site New York World yesterday published  Night of the living tax break : Five years after state lawmakers killed a corporate property tax exemption that had outlived its original purpose, it’s still stalking New York City’s finances, to the tune of more than $650 million this year. ...Other windfalls went to the headquarters of News Corporation — the owner of the New York Post — whose tax bill is cut by some $2.2 million this year, and Manhattan’s East River Plaza mall, a project co-owned by real estate giant Forest City Ratner, which got two breaks totaling $8.1 million. ...These are among the more than 7,000 properties that continue to receive abatements on property taxes under the city’s Industrial and Commercial Incentive Program, or ICIP, first launched in the 1980s to encourage businesses to locate or remain in New York City. That program was open to a wide array of business that built or made improvements to their properties. It expired in 2008, amid...

Today, Mayor Mike Bloomberg delivers his final State of the City address at the new Barclays Center arena, chosen because it has generated “unprecedented economic activity in the area.” He may even salute some well-publicized elements: an  award to the 1 millionth visitor , a new gallery  honoring black basketball in Brooklyn, a mural at the Dean Street entrance. Surely he won't specify how much the arena has cost city taxpayers, and whether that money might have been directed at real public goods, things like open libraries and Head Start. The city  acknowledges  $179 million in direct subsidies for land and infrastructure. But the city contribution is far greater than previously analyzed. As I detail below, free land for the project has been vastly undervalued or not even counted, adding up to nearly $80 million, at least, and likely more than $124 million. The beneficiary: developer Forest City Ratner. ( Update 9/8/16: Note additional $7,168,...

Forest City Ratner has withdrawn its odd challenge to the city's valuations of its Atlantic Yards properties, claiming the whole thing was a mistake. Or, perhaps, it wasn't, as I suggest below. As reported by DNAinfo.com, which broke the original story: In a letter sent to the city’s Law Department and Finance Department on Friday, FCR said it goofed on challenging the appraisals of the Barclays Center and other developments on the 22-acre Atlantic Yards property. “In challenging the assessments on Forest City properties, petitions on its arena and B2 sites were inadvertently included,” the letter said. “Forest City has instructed our attorneys to discontinue these petitions immediately.” (The New York Post also followed up , not crediting the publication that came first.) Update : the letter mentions only those sites. So apparently challenges to assessments on other Atlantic Yards sites continue. Also, given that the letter mentions buildings rather than tax lots, ...

Could the lot for Forest City Ratner's planned 32-story, 363-unit first tower on the Atlantic Yards site be worth just $6,000? That's what the developer is claiming, according to legal papers filed recently in state Supreme Court in Brooklyn. The city values the site at more than $400,000, calculating back from an ssessment, set at 45% of gross sales price, of $184,050. ( Documents filed with the Department of Buildings confirm that the site for the tower is Block 1127, Lot 56, or461 Dean Street.) Could the Barclays Center and its land be worth just $111 million, while the city Department of Finance valued it at about $741 million, with an assessment (45% of value) at about $334 million, as reported by DNAinfo.com? Remember, the Barclays Center is commonly called a $1 billion building but has been described by the developer as a $934 million project, involving "the cost of this building, the transit connection, the site work, etc." In the 2009 Modified ...