AY Financial Projections: We Got 'Em
Well, it looks like the ESDC has in fact coughed up the financial projections for the Atlantic Yards project. We haven’t had time to go through them too closely, but at first glance they do not paint as profitable a picture as many opponents suspect, generating a mediocre IRR of 9.6 percent. The biggest thing…
Well, it looks like the ESDC has in fact coughed up the financial projections for the Atlantic Yards project. We haven’t had time to go through them too closely, but at first glance they do not paint as profitable a picture as many opponents suspect, generating a mediocre IRR of 9.6 percent. The biggest thing that jumps out at us is that they show that FRC is planning to sell off most of the pieces of the project in 2015. Either that, or they just needed to estimate a terminal value and that seemed as good a year as any. We’re sure others far more qualified to analyze this stuff will be able to offer more insightful analysis. We’ve provided links to the three documents below. Have fun.
1) AY Cash Flows Returns
2) Combined IRR
3) Nets Arena Cash Flows
Earlier coverage and discussion:
ESDC Forced to Cough Up Financial Docs on AY [Brownstoner]
And Norman Oder’s response…
ESDC-released Documents Lack Vital Information [AY Report]
Photo by threecee
421a benefits for the broken angel site are as-of-right. Shahn would have to pay taxes that he wasn’t being assessed if he wanted to “not take” the abatement. That is, he would have to conjure up some number and send an unsolicited check to the city. That’s absurd.
Why is it relevant what FRC is earning on this project? All that matters is what the project will do for the community There is room for legitimate debate about that. But the project should be judged on its own merits, regardless of whether FRC makes one dollar or a billion.
Am I missing something? Isn’t the real point of AY to build a basketball arena for Ratner’s Nets?
Modern arenas are enormous cash cows, what with all their corporate boxes, luxury seating, and advertising deals. And don’t forget the rise in the value of the franchise that will invariably result from the move.
It wouldn’t really matter *what* Ratner does with the rest of AY. If he holds onto the team he’ll make a fortune every year on the club seats and skyboxes and the media rights, regardless of what does or does not get built or how long his company’s invoved. And if he sells, he’ll most likely see a substantial return on the $300 million he paid for the team.
Please correct me if I’m off about any of this. I haven’t been following things as close as most of you seem to have been. And I suck at math.
Folks – everyone who pays mortgage interest gets a subsidy on their mortgage via the mortgage interest deduction. The original point of it was to encourage home ownership which is thought to strengthen communities and promote other social goods. I don’t want to start a debate about the mortgage interest deduction, the point is that the subsidy is supposed to be to promote a public good.
The question here is does Ratner’s Atlantic Yards project provide a public good? I happen to think that it does provide a small public benefit, but a disproportinate amount of the benefits go towards one person at too high of a price for the rest of the community. Emminent domain and public subsidies for private development are not always bad, but they are being misused in this case.
4:56 – the idea that the rules are the rules and we must just deal with it is crazy. Sometimes the rules need to be changed when they don’t protect the people.
Donatella – your interpretation of Kelo is frightening, the SCt didnt vote to “expand” anything, they ruled that the ED used in New London fit within the previous precedents – in short – they ruled that there was a reasonable basis for the ‘public benefit’ claim of the New London officials –
ED was never strictly limited to roads, bridges, other infrastructure or public institutions and in fact has been used for economic development virtually forever. The one nuance in Kelo that the SCt hadnt ruled on, was that the development corporation was a private company.
donatella
gov can’t take your property via eminent domain without “just compensation”.
in the New Haven case you reference, the owner who lost that case was offered and eventually paid more than the value of her property.
I know there is something to be said for not being removed from someplace you consider to be your “home”, but if you are getting market value and up, and the project will increase the public good, it’s hardly a huge injustice….
Wally so Ratner will rent or sell at 2006 or 2021 rates?
To the people who think that the low income housing wont be built-that’s a silly statement that has no basis reality. The city and state have significant infrastructures (HFA, HDP, etc) that monitor these items quite closely. Ratner wont be able to get his plans approved or permits issued without simultaneously providing the low and moderate income housing that he is required to.
David, I think that Shahn’s refusal to answer your question is ample proof that he will be getting the tax abatement. Do as I say and not…