State officials admitted this week that when they approved Atlantic Yards last year they were relying on documents that were incomplete — and may have even been in violation of Bruce Ratner’s original pact with the state and city.
The documents contained Ratner’s cash-flow projections and other information required under the original Atlantic Yards Memorandum of Understanding, but lacked other key financial details of the project’s arena, 6,000 housing units and hundreds of thousands of square feet of commercial development.
The information in the documents had been provided by Ratner to the accounting giant KPMG, which made its own assumptions about the accuracy of the information. The company, whose work was paid for by Ratner, said it verified the Ratner-provided data “to the extent possible.”
Ratner’s failure to provide a comprehensive plan appears to violate the 2005 MOU, which was signed by the developer, Mayor Bloomberg and Gov. Pataki. That document mandated a public review of a “financing and operating plan” in exchange for political support and $200 million from the city and the state (since raised to $305 million).
The missing business plan was first reported by the New York Sun this week.
The disclosure that the ESDC approved Atlantic Yards without seeing Ratner’s full business plan comes after months of pressure from opponents and Brooklyn public officials who criticized the state for failing to release the full financial review of the largest development in the borough’s history.
Assemblyman Jim Brennan (D-Park Slope) and state Sen. Velmanette Montgomery (D-Park Slope) sued the ESDC to get the full review. Now it turns out that the state never had it to provide — and local politicians are furious.
“The state should have known everything there is to know about the project and disclosed it to the public,” said Sam Rockwell, a spokesman for Councilman David Yassky (D-Brooklyn Heights).
“The fact that they didn’t even have the first step completed doesn’t reflect well.”
ESDC spokesman Errol Cockfield denied state officials ignored their own MOU. The previous administration “felt comfortable” relying on the KPMG report, he said. “[The financial documents ] met the test for the previous administration to forward [the project] to the state for approval,” he said.
The KPMG report projects that Ratner will walk away with a $400-million profit from his state-backed $4-billion Prospect Heights Xanadu.
Brennan said he had sued to see the financial documents because they are important to backing up — or dispelling — Ratner’s claim that the project needs to be so big in order to allow him to build the basketball arena and 2,250 units of below-market-rate housing.
“This information is absolutely relevant to anyone seeking to amend this project at all,” Brennan said.
Forest City Ratner did not respond to questions from The Brooklyn Paper.