MTA Ignores Fiduciary Duty, Approves Revised Yards Plan
If you read the Atlantic Yards Report’s account of yesterday’s MTA hearing that resulted in a 10-2 vote approving the sale of the Atlantic Yards to Forest City Ratner at a drastically reduced price (in both present and expected value terms), it’s hard not to come to the conclusion that either (a) the people that…
If you read the Atlantic Yards Report’s account of yesterday’s MTA hearing that resulted in a 10-2 vote approving the sale of the Atlantic Yards to Forest City Ratner at a drastically reduced price (in both present and expected value terms), it’s hard not to come to the conclusion that either (a) the people that sit on the MTA Board ain’t too bright or (b) the fix was most certainly in. Or (c) both. The heart of the MTA’s fallacious position was encapsulated by board member Jeff Kay’s defense of the new pricing structure: The market is what the market is, declared board member Jeff Kay.” Um, except that the board rejected a higher price from Extell back in 2005 and has refused to either get a current independent appraisal or solicit new offers to find out what the market price really is. (In fact, at yesterday’s hearing Daniel Goldstein made an offer on behalf of DDDB of $120 million for the property over 12 years—the details of the offer are posted here.) The board ignored Assemblyman Jim Brennan who tried to remind the MTA that it is legally bound not to squander its assets; he also pointed out that the Public Authorities Accountability Act requires an independent appraisal. Council Member Letitia James pointed out the irony that taxpayers bailed out the MTA and now the MTA is bailing out a private developer, adding How can you sell off a valuable public asset without considering market value? Goldstein also said that it’s likely his group will sue the MTA for its actions. Anyway, there’s no point in rehashing the entire play-by-play here. Go read the Atlantic Yards Report’s detailed account and watch the video above.
MTA Approves Deal 10-2 Despite Warnings [AY Report]
Atlantic Yards Project Enters a Crucial Period [NY Times]
Bailout! State Cuts New Deal to Save Stalled Yards [NY Post]
MTA Signs Off on Sweet Atlantic Yards Deal [NY Daily News]
MTA Approves New Deal for Atlantic Yards [WNYC]
As BK RE Vet points out – no demand. No demand, lower price. MTA probably does not want to even see the value an appraisal would yield as there is a high probability that it MIGHT be lower than the deal that is on the table.
BXGRL – I am only refering to the Atlantic Yards real estate.
bkn4life – I think your math is wrong – $100 psf not $10. That said, the comparable measure is buildable sf, not the property’s two dimesional size.
ontheparkway- I agree with you. When they turned down the higher rail yards bid that was it. You knew they had backdoor deals going on and ratner already had it. It sucked big time and still does. I’d like to see how the MTA tries to justify this- and I bet they get a lot of public flak over it too. Hopefully heads will roll.
bxgrl has it. The high-rise, Co-op city (or even Trump Tower) model is dead–take a look at what is selling big in Manhattan, not to mention Brooklyn. People who spend $$$ for luxury housing in Brooklyn don’t want to live in skyscraper mega-complexes, they want to live in architecturally cool boutique buildings (like the Maier on GAP, or the buildings going up on the High Line) or in classic old brownstone/limestone houses and pre-war buildings.
The only way they could have sold the high-rises in AY is if they had the “Gehry” brand.
The MTA is a public agency. Even most of Ratner’s paid shills know that.
Bxgirl, it’s possible that it’s getting tougher to defend this deal as it gets worse and worse.
Remember, when Ratner started this thing, it was supposed to
1>be the best deal for the MTA (turned out to be $250M worse than the Extell deal)
2>create a huge financial boon for NYC (city budget guys now say it’s a loss)
3>bring world class architecture to Bklyn (I didn’t like Gehry’s design, but the new arena is way worse. even backers say it’s a barn)
4>create tons of affordable housing (wanna bet this’ll ever get built?)
5<line bruce ratner’s pockets and he spreads the wealth to his pals and “community partners” (still on target with that).
I could deal with any of this except giving away public property for pennies.
mr CAPITALS:
maybe thats why mr goldsteins proposal of aggregate smaller developments is worthy of more than the disdain the board showed him.
open up a legit RFP. see what you get. otherwise your piehole is spouting some form of unsubstantiated wisdom. the shortcut your “wisdom” espouses isnt worth the future of that railyards. they have been a railyard for 100 years. a few more wont hurt them.
till then, i laugh at you real estate veterans.
FCRC couldn’t finance it either- isn’t that why they got public financing? ANd maybe large scale development is not the way to go- except for ratner and the construction industry, most people (the ones who would actually live there) probably would find the size and scale a turnoff. I don’t know for sure-no one does but I lived in some pretty huge scale apartment buildings in the past and I can tell you they have very little appeal, compared to the brownstone neighborhoods. But that’s just my opinion, in any case.
Joe – I love dreamers. Where do I sign? 🙂
oops sorry ontheparkway.
seriously, where did i get the idea that it was privately owned?!
*rob*
Hey, BK, please don’t shout.
But this is not a deal. It’s negative income for taxpayers. If large-scale development is dead (and who am I to argue), then maybe this one should go into a financially-induced coma for a while.
Even in Hong Kong, (EVERY project here is a backroom handshake deal with mega-developers and the government), the MTA capitulation is just outrageous. The Hong Kong government would never let any property go without squeezing big bucks from the tycoon-developers!
Also, our public transit rail system is the best in the world. It is newer and less crowded than Tokyo’s too. Twenty minutes, door to door, from WonTon’s Hong Kong apartment to the airport!. We use rechargeable smart cards embedded with chips–you just pass them over a sensor to enter. You don’t even have to take them out of your wallet!
When I come back to New York, I feel like I have returned to the 19th century.