Junk Yard Bonds Get Trashed
Develop Don’t Destroy Brooklyn put on some good theater when it organized the ritualistic throwing of mock Atlantic Yards Arena Bonds into the back of a garbage truck outside S&P’s headquarters in downtown Manhattan yesterday, but the action was aimed at raising awareness about some serious issues. From the Atlantic Yards Report…”Probably the most important…
Develop Don’t Destroy Brooklyn put on some good theater when it organized the ritualistic throwing of mock Atlantic Yards Arena Bonds into the back of a garbage truck outside S&P’s headquarters in downtown Manhattan yesterday, but the action was aimed at raising awareness about some serious issues. From the Atlantic Yards Report…”Probably the most important one concerns the ESDC’s creation of the Brooklyn Arena Local Development Corporation (BALDC), which, however legal, skirts the review of the Public Authorities Control Board (PACB) and Comptroller, because only subsidiaries which have the same members or directors as the ESDC or Job Development Authority are included.” AYR also notes the low turnout of both politicians (Tish James was the only one to show up) and the anemic coverage of the issue in the press. Another troubling issue surrounding the bonds, according to AYR: “While the $500 million in tax-exempt bonds authorized by the Brooklyn Arena Local Development Corporation (BALDC) are supposed to be non-recourse, with no risk to the state, state officials have refused to rule out the possibility that the state would bail out the bondholders should revenues not meet expectations.” The post concludes with a long list of questions for both the ratings agencies and the ESDC, but we won’t be holding our breath for the answers.
“Junkyard Bonds” Tossed in Garbage Truck [AY Report]
Photo by Tracy Collins
Yes BrooklynGreene you are – there is no provision for the taxpayers to “take over” if the bonds do not perform – none, zero, nada – it is pure fiction made up by DDDB – these are non-recourse bonds, with no guarantee by the State or City.
gong.
Not only they proposing to dump hundreds of millions of tax-free bonds on the market to fuel private development…but the taxpayers might very well be forced to take on the debt if the bonds don’t “perform” as expected??? Am I missing something or is this a scam?
Where’re “jugs” and company? Those posters seems to post only to AY stories.
“state officials have refused to rule out the possibility that the state would bail out the bondholders should revenues not meet expectations.”
More F-U-D by DDDB, on a campaign to say anything, to meet their objective – the Bonds are non-recourse – thats it! The state has not, and should not issue a statement regarding its reaction to potential default….just like the state would not issue a statement saying it would not bail out Zabars if they defaulted on their debt – the terms of the lending are contained within the bonds.
thats how it works
No worries. The Fed, Fannie or Freddie will scoop up these toxic assets (preferably from a flip sale from a TARP bank) just like they are holding the bag on every other crappy real estate bond these days.
They should have had the wrestler Junk Yard Dog show up for the event. THUMP!
Support your local out-of-scale development with tax-exempt bonds, because, it’s good to throw clean money at the bad. That giant sucking sound is your tax dollars being sent to the banksters pockets…
Why don’t these people get a life.
I’m going to follow these very closely. If, after they are issued, they ever fall to 10 cents on the dollar; then this will be easy money for hedge funds to make at the expense of the taxpayer.
Queue up stevieb….