As we've been saying for years now, the project has an enormous public cost--for taxpayers and the tax coffers. Here it is from Rich Calder in the NY Post:
YOUR 'NET' LOSS
And remember, Ratner stands to make an enormous profit on the back of these subsidies and breaks, a profit the developer has tellingly withheld from the public.
$2B IN TAXES TO RATNER
Developer Bruce Ratner's Atlantic Yards project in Brooklyn is boosted by so many sweetheart deals that the public stands to pay for more than half the cost of his controversial $4 billion plan, a Post analysis found.
Ratner's Nets Gain
The project - which would bring an NBA arena and 16 residential and office towers to Prospect Heights - is in line to receive at least $2,157,260,000 worth of government subsidies, according to project records and interviews with past and present state and city officials.
And the developer is gearing up to ask for even more corporate welfare.
The president of Ratner's parent company said in a conference call with investors last week that the project will "still need more" subsidies.
The state and city say Ratner has yet to ask for extra assistance, but the developer last month admitted that a sagging economy is holding up construction of the project's residential and office space.
Among the biggest revelation of the Post analysis is what project skeptics have feared for years - that Ratner can build the planned 18,000-seat arena for his New Jersey Nets to move to with little financial risk.
"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," said Michael D.D. White, a former vice president and top lawyer for the state finance authorities.
White - who provided the newspaper with subsidy projections based on his own review of project documents --estimates that Ratner would save slightly over $1 billion in tax payments through a Payment in Lieu of Taxes deal with the state.
Under the deal, he said these payments would be "intercepted" and go directly towards settling debt service on state bonds to build an $950 million arena that Ratner will "all but own," with remaining cash going towards arena operating costs.
While the state will technically own the arena, Ratner under a cozy $1-a-year lease deal, will control it and all its potential profits.
Assemblyman Richard Brodsky (D-Westchester) warned that Ratner must deliver what was promised when the state approved the project in December 2006.
"All the big projects -- the 7-line, downtown Manhattan, Hudson Yards, Atlantic Yards -- they're all hanging by a tread, and the notion the taxpayers are going to invest money while the developers don't meet their commitments, if that's what people expect, there is going to be a fight about it," said Brodsky, who chairs the Assembly committee that oversees state entities that approved these projects.
Spokespersons for the city and state said it's unclear whether Ratner would receive more subsidies if he asked, adding it would need to be reviewed. But some Brooklyn-based council members have said their dead set against giving Ratner more cash.
(Note: as Norman Oder
RATNER'S NETS GAIN
PROJECTED ATLANTIC YARDS SUBSIDIES (SAVINGS TO BRUCE RATNER)
*1. Arena real estate tax savings through 30-year Payment in Lieu of Taxes (PILOT) agreement with state = $1,032,740,000
*2. Taxes saved on $1.406 billion federal-state-local tax-free bonds to create affordable housing = $261.25 million
3. Cash from New York City for infrastructure and/or land acquisition costs = $205 million
* 4. Taxes saved on estimated $1.032 billion fed-state-local tax-free bonds to finance $950 million arena = $191.9 million
5. Tax credits through special 421-a "carve out" state legislation = $150 million
6. Savings from purchase of Atlantic Rail Yards at price less than MTA appraisal= $114.5 million
7. Cash from New York State for infrastructure costs= $100 million
* 8. Mortgage recording tax exemption (on residential buildings) = $39.37 million
* 9. Value of city land under arena given to developer= $27.1 million
* 10 Potential tax credits for low-income housing units= $18 million
*11. Sales tax exemptions (only arena) = $17.4 million
12. Sale tax exemptions (other than arena) = Undetermined
13. Extra funds for "extraordinary infrastructure costs"= Undetermined
14. Credits for public utilities relocation= Undetermined
GRAND TOTAL=AT LEAST $2,157,260,000
*Estimations by Michael D.D. White, an urban planner and former top lawyer for New York State's finance authorities, after reviewing public documents. Other figures based on New York Post examination of state records and interviews with government officials.
Note: Atlantic Yards is estimated to cost $4 billion.