Ratner’s $500M slip is showing

The Brooklyn Paper
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The Atlantic Yards project approved last week by state officials would generate almost $500 million less in tax revenues than its developer and its Albany boosters promised just five months ago.

Now the Empire State Development Corporation says that the 16-skyscraper residential and arena mega-development would generate $944 million in tax money over 30 years — $456 million, or one-third, less than the ESDC said this summer when a slightly larger version of Atlantic Yards was going through the public approval process.

At that time, the city and state each coughed up an initial $100 million for infrastructure improvements around the site, largely on the promise that this small investment would later fill public coffers with Atlantic Yards tax revenues. The $200 million is just a small part of a multi-billion-dollar public subsidy of the project in the form of tax abatements, low-interest loans and reduced price for Ratner to acquire publicly and privately owned land in the 22-acre Atlantic Yards footprint.

Originally, Ratner claimed the project would generate $6 billion in tax revenues.

The latest numbers are in the final environmental impact statement approved unanimously by the ESDC board last week.

ESDC officials said the shortfall was due to a recent eight-percent downsizing of Ratner’s Xanadu.

“The project has been scaled down,” said ESDC spokeswoman Jessica Copen. “In particular, when you scale down commercial space, the revenue is affected even more.”

The eight-percent reduction in overall square-footage that occurred between the approval of the draft and final impact statements returned the project, whose size had been increased twice, back to its original, eight-million-square-foot dimensions.

But Copen said that commercial space in the project — which generates more jobs and, therefore, more tax revenue — had been cut 44 percent.

At least one independent analyst questioned that.

“On the face, it seems like a large revenue falloff given the amount of space being cut back,” said Doug Turetsky, a spokesman for the city’s Independent Budget Office.

Comptroller Bill Thompson, who has endorsed Ratner’s $4-billion plan, declined to comment on the shifting numbers.

But Borough President Markowitz, the highest-profile booster of a project whose champions include Mayor Bloomberg and Gov. Pataki, did not lessen his enthusiasm for Atlantic Yards, $500 million shortfall or not.

“As the hub of an enhanced and vibrant Downtown Brooklyn, Atlantic Yards will be both a tax generator and magnet for investment,” the Beep said in a statement. “Even with the height reductions that I and others called for, which preserve every unit of affordable housing pledged, we’re looking at a billion dollars in new tax revenues for Brooklyn.

“Combine that with the revenues from the economic development we see already springing up in the surrounding area as investors anticipate the arrival of the Nets arena, and we’re looking at a very healthy tax base for Brooklyn’s future,” he concluded.

The state’s Public Authorities Control Board is expected to consider the project on Wednesday. That obscure body is controlled by just three men: Gov. Pataki, Senate Majority Leader Joe Bruno (R-Rensselaer) and Assembly Speaker Sheldon Silver (D-Manhattan).

Assemblyman-elect Hakeem Jeffries (D-Prospect Heights), is one of many leaders who is calling for a delay in the vote.

“All we can do now is ask for more time to address these concerns,” he said.

Many project opponents have pinned their hopes on the Sphinx-like Silver, who, like Bruno and Pataki, supports the project.

But Silver recently voted against two of the governor’s pet projects: the West Side stadium last year and the Moynihan station project earlier this year.

A spokesman for Silver declined on Wednesday to comment on the tax revenue shortfall. Gov. Pataki also took a pass.

“The plan is still being looked at,” said John Sweeney, a spokesman for the governor’s budget office.

Updated 4:00 pm, November 10, 2010
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