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July 28, 2005

MTA's Shut-out of Extell Confirmed

goldsteinAs reported yesterday, the MTA has caved to what we are sure are vast political pressures and agreed to negotiate only with Ratner for 45 days. While at least they are standing up for themselves a little by trying to extract some more cash, to the outside observer, the decision adds a whole 'nother later of stink to what has already been a suspect process. While we are in favor of the area getting developed and think a master plan is called for, we have to side with DDD's Daniel Goldstein (pictured) on this one: It is truly unconscionable that Extell would get cut out at this point given its higher bid. The fact that many residents prefer Extell's more modest (though still large-scale) plans aside, the eleventh-hour bidders are offering three times as much money! As one reader commented yesterday, "All along this has reeked of political back-room dealing to the extreme... Robert Moses would be proud but I'm not."
M.T.A. to Deal Only With Ratner [NY Times]
Slideshow [NY Newsday - Photo by J. Klein]




Posted by Brownstoner at 8:44 AM | Comments (9)
Categories: Development

Comments

If you were an informed citizen, you'd have looked at the details of the two bids and realized that Ratner's still provides more financial benefits to the MTA than Extell's. It's not only about the cash. You have to look at the infrastructure they are willing to fund as well. If you consider that, the MTA gets a better deal with Ratner.

Posted by: Justin at July 28, 2005 9:51 AM

A little testy, aren't we. You are referring to the fact that Ratner will build a new yard and cover other expenses? Developers have been known to promise the world to get a deal done. We're not saying that Ratner's offer isn't better, but if they are going to take the extra time, shouldn't they also give Extell the time to flesh out its proposal and up its bid if necessary?

Posted by: Brownstoner at July 28, 2005 9:57 AM

Moving infrastructure cost was apprised by MTA for 57 million. Excell offered 150M$ Ratner 281M$.

It obviously shows that the bidding process was not real; they have known winner all the way.
Whole deal was set in the back room. Hey Americans. Where is your democracy?
It is extremely unfair that for one party is ok to change the bid and not for the other.
Next time they should not bother with any biding at all.

Robert Moses would be proud.

Posted by: malymis at July 28, 2005 10:15 AM

The extell deal offers more money up front...but, in the long run, they would be spending much less money on the project...now i'm not advocating for either side here, but from some points of view ratner's plan is better for the city...more growth, more jobs, etc.

discuss...

Posted by: synonymous at July 28, 2005 10:53 AM

This process is so openly corrupt, it basically guarantees future lawsuits. A silver lining for some, I guess, but to what end?

Posted by: Anonymous at July 28, 2005 11:04 AM

Justin, the MTA didn't buy Ratner's construction costs as add-ons to the purchase price. If hey had, they would have said his bid was worth the inflated 329 million Ratner said it was. they didn't buy it and shouldn't.

Why? 2 reasons:
1. Both developers will do track relocation, environmental clean up, platfrom building and infrastructure improvements.
2. Construction costs should not be added to purchase price, makes no sense, and the MTA agreed.

Posted by: ratnerville at July 28, 2005 12:01 PM

I don't think comparing the 2 offers is as simple as a $50 vs. $150.
Infrastructure requirements paid for by MTA differ.

Posted by: Anonymous at July 28, 2005 12:08 PM

good article on the subject
http://www.observer.com/finance_financialpress.asp

Posted by: malymis at July 28, 2005 1:17 PM

Now lets look at this rationally. In order to build anything there, you have to either move the rail yards or build the deck. This adds no "value" to the bid; it is just a cost the developer has to bear in order to do the deal.

Clearly, this whole thing smells to high heaven. If the fix wasnt in, then both Ratner and Extell would have been given the opportunity to provide best and final offers. MTA Chairman Kalikow's claim (heard on the radio this morning) that it would be immoral to negotiate two leases at once is ridiculous. Get the best offer, then negotiate.

Posted by: bored at work at July 28, 2005 1:51 PM

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