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April 14, 2008
You Pay and the Nets Will Play
Forest City Ratner is poised to get $2,157,260,000 in tax subsidies for Atlantic Yards, according to an article in this morning's Post, but even that may not be enough dough from public coffers. In a conference call last week the firm's president told investors that the mega-development will "still need more" subsidies. Michael D.D. White, a real estate attorney who has criticized how Atlantic Yards is being financed, came up with a subsidy tally for the newspaper (reprinted on the jump). "The setup is basically like paying taxes on your home and then having the government use that money to help you pay off your mortgage," says White, who estimates that FCR will save $1 billion in tax payments that will go directly toward paying for the $950 million Nets arena. FCR spokesman Loren Riegelhaupt takes issue with White's tally, saying no subsidies are set in stone aside from $305 million from the state and city for infrastructure and land-acquisition costs. Riegelhaupt also says that the entire project is supposed to bring in $1 billion in net tax revenues over its first 30 years.
Your 'Net' Loss [NY Post]
Ratner Feasts on Public Subsidies [Brownstoner]
Photo of Nets billboard on Atlantic by threecee.
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Comments
Wow, no kidding, a zero risk sweetheart deal for the developer? Really?
Posted by: guest at April 14, 2008 9:46 AM
Why doesn't the city just lease Prospect Park to Ratner and let him make money off the naming rights. At least we won't have to use eminent domain.
Posted by: guest at April 14, 2008 10:27 AM
Why doesn't the city just lease Prospect Park to Ratner and let him make money off the naming rights. At least we won't have to use eminent domain.
Posted by: guest at April 14, 2008 10:28 AM
And the people fighting this are the greedy ones. That is a laugh.
Thanks Brownstoner, for that plain English visualization of why Ratner and his project is a hack job. Or maybe a snow job.
Posted by: guest at April 14, 2008 10:32 AM
While this analysis is eye opening, you can't compare the $2 billion subsidy to the $4 million cost. The PILOTs will pay principal and interest on tax-exempt bonds for 30 years. Same with the interest savings due to tax-exemption. These numbers should be expressed in today's dollars to be comparable to the cost of the project. To compare the subsidy with the cost, you'd need to include all the interest on the borrowings Ratner is using for the entire project. The result would still be shocking, but far from implying that the government is paying half the costs.
Posted by: guest at April 14, 2008 11:34 AM
Thanks for the insight, 11:34, but don't expect it to change many minds. The anti-AY NIMBYs never let facts get in the way of their claims.
Posted by: guest at April 14, 2008 2:16 PM
Finally everyone's catching on. Only took 4 years...
Posted by: guest at April 14, 2008 2:36 PM
This sounds similar to what DDDb has been saying for years, though it turns out that DDDb was slightly UNDERestimating the costs to the taxpayers.
What's interesting here is that this shows that the numbers that DDDb has been throwing around are quite accurate. This should boost their credibility for people who have yet to take a side on the issue. I doubt 2:16 falls in that category.
Posted by: guest at April 14, 2008 4:39 PM
D-U-N-G D-E-A-L!
Posted by: guest at April 14, 2008 6:36 PM
D-U-N-G D-E-A-L!
Posted by: guest at April 14, 2008 6:40 PM
Something stinks around Brooklyn and it looks to be a result of all the people who been drinking Ratner's cool aid. There is nothing to defend these numbers, NOTHING. The government doesn't even need to be paying half the costs to make this stink of shit.
Posted by: guest at April 14, 2008 7:11 PM
how much in taxes is the city collecting from this land now? how much will the city be collecting once developed?
but if all those items weren't enough, the one re mta appraisal takes the cake.
the analysis in this article isn't even worth the price of the scanned page.
Posted by: BrooklynLove at April 14, 2008 8:15 PM
bklove
the rail yards were appraised by the MTA appraisers at 214 million
Ratner bid 50 and eventually agreed to pay 100
hence the 114 million dollar difference. What is your dispute with that analysis?
Posted by: guest at April 14, 2008 8:44 PM
bklove
the rail yards were appraised by the MTA appraisers at 214 million
Ratner bid 50 and eventually agreed to pay 100
hence the 114 million dollar difference. What is your dispute with that analysis?
Posted by: guest at April 14, 2008 8:44 PM
an appraisal from the seller is like a promise from OJ
Posted by: BrooklynLove at April 14, 2008 9:52 PM
ok, then don't use the appraisal. use the $150 million Extell bid.
the city was collecting a few million from the properties prior to Ratner coming along. once he gets an 11+ FAR from a complete zoning override by NY state and an arena, NO taxes will be paid. the taxes he should be paying will go to pay his mortgage.
something wrong with that analysis?
Posted by: guest at April 14, 2008 11:33 PM
comparing the extell bid doesn't work b/c it assumes all other aspects of the deal and development had extell gone forward would have been comparable to the current fcr deal.
your analysis re taxes is incomplete and assumes that any development on this scale in this area could happen without a similar arrangement.
this is the fundametal issue with all anti AY arguments. they're couched as anti ED or anti financial incentives for ratner, but really what they're about is anti development.
Posted by: BrooklynLove at April 15, 2008 7:33 AM
BrooklynLove's statement that the analysis is incomplete because it "assumes that any development on this scale in this area could happen without a similar arrangement." So are you saying that the point of the project is in order to build something big?
I thought the necessity of scale was to create benefits (profits for the developer and tax et ceter for the state). If these same benefits can be achieved with a smaller project, then wouldn't that make the project more likely to be built? Why not have a project with the benefits that will actually be realized, instead of a project that has the same benefits and less of a chance of being built>
Posted by: guest at April 15, 2008 12:00 PM
BrooklynLove's statement that the analysis is incomplete because it "assumes that any development on this scale in this area could happen without a similar arrangement." So are you saying that the point of the project is in order to build something big?
I thought the necessity of scale was to create benefits (profits for the developer and tax et ceter for the state). If these same benefits can be achieved with a smaller project, then wouldn't that make the project more likely to be built? Why not have a project with the benefits that will actually be realized, instead of a project that has the same benefits and less of a chance of being built>
Posted by: guest at April 15, 2008 12:10 PM
(sorry for my previous double post...)
Okay, let's assume for a second that BrooklynLove is correct, and that all criticism of the project should be questioned skeptically. Doesn't the same level of questioning also apply to the ESDC & Ratner? Their financial numbers have never been fully released. What is going to be the cost per unit of the project? Is this the most cost effective way to create affordable housing? We don't know since there has never been an analysis by the state.
Also, we're talking about the Post's numbers. They are not an anti-AY advocacy group.
Posted by: guest at April 15, 2008 12:13 PM
12, 12:10, 12:13. i used the word "and" not "because".
Posted by: BrooklynLove at April 15, 2008 12:56 PM
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