Friday, August 8, 2008

The Unanswered Question...

From the right & worthy DDDB:
Atlantic Yards IS Too Costly

Governor Paterson was interviewed on WCBS-radio on Tuesday and was presented listener questions. The following exchange occurred around 11:15 into the program (audio link):

WCBS: "With the state in such dire fiscal straits why are you supporting this costly project, which according to this writer may end up costing the state and New York City about 2 billion in subsidies and tax breaks?"

Governor Paterson: "There is a point that the listener correctly has addressed, that if it starts to become too costly, a lot of these projects that we were for, we might have to change our mind. To this point we don't think that we are there with the Atlantic Yards and continue to try to help them."

It is encouraging to know that the Governor agrees, especially in this economic environment, that megaprojects that become too costly require re-evaluation. But we'd argue that we are there with Atlantic Yards and have been for quite a while. With no evidence at all that Forest City Ratner can build its project, let alone bring its pruported benefits to fruition, the city and state have committed substantial subsidies, breaks and other special support to the project.

Clearly during this dire fiscal crisis—so dire the Governor himself presented a rare broadcast speech about the situation just two weeks ago—the construction of a One Billion Dollar and Counting Arena is a frivolous and risky endeavor which is too costly. The city and state will, if not legally then effectively, be on the hook for the $800 million tax-exempt bond Forest City Ratner has stated it is pursuing.

Then we must look at some of the rest of the accounting:
- $100 million direct cash subsidy from the state.
- $205 million direct cash subsidy from the city.

- A blank check promised by the city for "extraordinary infrastructure costs."
- An estimated $1.4 billion worth of tax-exempt housing bonds from the state.

Though the NY Post's $2 billion in government back financing is debatable, the developer claimed three years ago that the public investment in the project would be $1.1 billion. Either figure is too costly considering neither the city or state have shown that there would be a meaningful financial return for the taxpayers—especially seeing as how Ratner has provided the public and government with no confidence whatsoever that the project can be built.

Ratner's land speculation—speculation on private and public land (the rail yards and city streets)—is too costly.

And while the MTA threatens successive fare hikes, the agency which is largely controlled by the Governor, can make a choice:
Does it close its $100 million deal with Ratner to sell the 8-acre Vanderbilt rail yard to the developer well below the $214.5 MTA appraisal of the property? Or does it pull out of that deal (the deal has not closed yet and no money has been exchanged), divide the yards into multiple parcels and put the parcels through a genuine bidding process which would be likely to bring in something around the appraised value or even higher?


New York State, & Governor Patterson are taking no serious measures to cut waste- as evidenced here - which makes the unanswered, unexamined question loom even larger - in light of serious financial difficulty, cut backs in education, transportation and just about every other area of the state budget, Bruce Ratner and Forest City are still getting their pork...which leads me to ask once again, the unanswered question Why does Bruce Ratner have so much power?

I am beyond thinking that its because of a little lobbying and a few lunches for legislators....

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