Arena $ analysis stalled

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Five months after a city fiscal watchdog announced that it would analyze the cost to taxpayers of developer Bruce Ratner’s proposed $2.5 billion Atlantic Yards project work has yet to begin on the study.

Officials with the Independent Budget Office, a publicly funded non-partisan agency, agreed last July to study Ratner’s plan to build a basketball arena, office skyscrapers and 14 residential-commercial high-rises after competing private studies alternately painted the Prospect Heights plan as a major boon to city coffers and a $500 million drain to taxpayers.

But in October, IBO Director Ronnie Lowenstein met with Rep. Major Owens, state Sen. Velmanette Montgomery, City Councilwoman Letitia James, and neighborhood activists Patti Hagan and Daniel Goldstein — all of whom are opposed to Atlantic Yards — and told them nothing could be done until Forest City Ratner turned over detailed financial information, which it has yet to do.

“If you don’t have that information, it narrows the scope of what you can do,” said Doug Turetsky, an IBO spokesman. He said in October that if the agency sensed the negotiations were still “months and months” away, they might go ahead and complete a very preliminary report to respond to the immediate interest of local elected officials and the public. To date, nothing has been prepared.
Forest City Ratner Executive Vice President James Stuckey estimated the plan could cost the public $500 million at a community meeting on Nov. 29. A study released in July by Columbia University researcher Gustav Peebles and urban planner Jung Kim estimated a $1 billion price tag for taxpayers.

And while Ratner said in September that negotiations with the state agencies presumed to be involved in the project — the Empire State Development Corporation and the Metropolitan Transportation Authority — would be completed before the end of this year, the hope of that happening now appears to be slim.

And there still exists the possibility that Ratner and the ESDC could sign a memorandum of understanding committing partial funding of the project before the independent authority has had a chance to weigh in.

“We did ask [IBO] if they could at least make some projection as to what it would require to support 4,500 or 5,500 new families in terms of police protection, and fire protection, and traffic safety and schools, and other things the city would look at paying for,” said Montgomery, who organized the October meeting.

“They did not give us any indication of when they would have a report ready,” she said.

“We’ve proceeded generally but haven’t decided what we might do,” Turetsky said this week. “In part we’re trying to assess, well, are we going to know soon how much FCR and the city are going to need in terms of what they’re asking?”

The plan would be built using air rights over 11 acres of MTA-owned railroad storage yards and 13 acres of private property that could be condemned under eminent domain for use by Ratner.

At the Nov. 29 meeting, Stuckey said Atlantic Yards would automatically be eligible for many “as of right” tax incentive and tax abatement programs that are funded by city taxpayers.

Among the programs is the Industrial Commercial Incentive Program, which offers property tax exemptions and abatements, and a 421-a tax abatement for offering the 2,000 units of low- and moderate-income housing they have pledged.

The city Economic Development Corporation praised the Ratner project at a City Council hearing on May 4, with a spokesperson saying “the benefits outweigh the costs.”

When asked by council members how much money the city would have to fork over, the agency said they were still working on the numbers but would have them in “several weeks.”

To date, no cost analysis has been released by the EDC, and a spokeswoman said this week that none would be available until the specifics of the plan were announced by Ratner.

“Until their plan is final, EDC will not have a full analysis,” said EDC spokeswoman Janel Patterson, “and we wouldn’t release anything prematurely.”

Residents shared their concerns at the Nov. 29 meeting, which was co-sponsored by community boards 2, 6 and 8.

When a question arose about how much the project would cost taxpayers if it did not “generate enough revenue” to pay off whatever bonds might be issued to help pay for the development, many audience members clapped in support of raising that issue.

“It’s the presumption there’s going to be city and state bonds,” said Stuckey. “What we have asked the public sector to do is pay for the infrastructure that’s necessary to the project,” which, he said, is typical of any new development.

“We are simply asking the city to do what it normally does — to build roads, to build sewers,” he said. Stuckey estimated those infrastructure costs to be about $500 million.

Montgomery, meanwhile, said she hopes to cajole the IBO into releasing some sort of study prior to Ratner’s release of a final plan.

“It’s my understanding that Ratner has been looking around for subsidies already, so it’s not like they have no idea,” said the Prospect Heights legislator.

Updated 4:00 pm, November 10, 2010
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