Immediate Release: September 6, 2005
Sweet Deal for Ratner, Raw Deal for Taxpayers
In Incomplete Analysis, Independent Budget Office
Projects Meager Return for the Taxpayer on Ratner Arena
NEW YORK, NY—Today the City's Independent Budget Office (IBO) released
an analysis of Forest City Ratner's (FCR) proposed 8-million square
foot mixed-use development in Prospect Heights, Brooklyn. The IBO
projects a meager return on taxpayer investment–a return of less than
$1 million per year for New York City. The IBO report only analyzes
the proposed Nets' arena but fails to analyze the bulk of FCR's proposal—7.2
million square feet of approximately 7,300, mostly luxury, residential
units. In their analysis the IBO fails to consider numerous public
costs and economic impacts such as traffic, pollution, rezoning, security,
police, fire, sanitation, and schools. The report also overestimates
some key revenue streams.
FCR's commissioned economic analysis, by Dr. Andrew Zimbalist, wildly
exaggerates the projected benefits from the arena to the taxpayer.
Zimbalist, who the Mayor, Governor and other elected officials have
relied on for the project's economic benefit projections, predicted
a surplus for the city and state that is four times that projected
by the IBO.
The public also does not know what the estimated profit is for Ratner.
FCR's profit estimate, or pro forma, was part of their proposal document
submitted to the MTA. But the FCR profit estimate has not been released
to the public by the MTA.
"Ratner's projected profits for the city and state are exponentially
greater than any independent study has shown, and Ratner has hidden
his own projected corporate profits. How sweet a deal is Ratner getting
and how raw a deal is the public getting? Very sweet and very raw,"
said Develop Don't Destroy Brooklyn spokesman Daniel Goldstein. "Less
than $1 million a year is an unacceptably small return on a huge public
investment. It is incumbent upon the MTA to publicly release Ratner's
projected profits, as they did for his competitor, Extell. We need
to know what kind of profit Ratner will make on his project, because
the IBO report shows that the public will barely get a return on its
The MTA reaches its self-imposed 45-day exclusive Atlantic Yards negotiation
deadline with FCR this Saturday, September 10th.
Goldstein concluded, "How can the MTA reach an agreement with FCR
before they have publicly announced Ratner's profit projections? The
IBO report shows that there is nothing unique about the Ratner proposal
that would justify what has effectively been a closed bidding process
by the MTA."