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BAILOUT! State cuts new deal to save stalled ‘Atlantic Yards’

The Brooklyn Paper
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State officials threw Atlantic Yards developer Bruce Ratner two lifelines this week in an effort to salvage the bare bones of his original 16-skyscraper office, residential and basketball arena complex.

On Wednesday, the Metropolitan Transportation Authority, citing the effect of the recession on Ratner’s stalled $4-billion project, relieved the developer of his responsibility to make $200 million in infrastructure improvements at the Vanderbilt railyards in Prospect Heights — and gave him the development rights over the yards with just a $20-million down payment instead of the $100 million lump sum he pledged for the full 22-acre site in 2006.

Ratner has until 2031 to pay off the remaining $80 million.

“It’s not quite as good [a deal] as we had hoped,” Gary Dellaverson, said the MTA’s chief financial officer on Monday after presenting the new contract publicly. “Obviously, from every vantage point, it would be better to have $100 million at closing.”

MTA officials said they did not believe that Ratner’s less-extensive renovation of the railyard would affect Long Island Rail Road service — though the MTA originally cited Ratner’s commitment to a full rehab of the train yard as the reason he was given development rights over another bidder who offered $50 million more.

One day before the MTA board vote, the Empire State Development Corporation, also citing the economic downturn, amended its agreement with Ratner to give him more time to build the entire project — and more loopholes to not build.

In the “modified general project plan,” the ESDC admitted that it is only currently moving to acquire the eight-acre site above the railyards at the corner of Atlantic and Flatbush avenues, while the remaining 14 acres are off the table indefinitely.

For now, the ESDC is sticking to the line that the full “Atlantic Yards” project will someday be built.

“The remainder of the site will be acquired when necessary for development,” Steve Matlin, the ESDC’s counsel, told the agency’s board on Tuesday.

The “remainder” includes the vast majority of the 2,250 below-market-rate housing and open space that was part of the project when it was originally approved in December, 2006 — key public benefits that greased the approval process of the highly controversial project.

Under the new plan, Ratner would complete the project by 2019, but the pact is also laced with escape clauses that allow the developer to walk away or postpone what was once supposed to be a 22-acre mega-project in Prospect Heights. The developer need only cite “adverse economic conditions … over an extensive period of time,” according to a memo describing the deal.

Matlin said a new deal was a do-or-die situation.

“Without these changes, the project cannot move forward,” Matlin said.

MTA board members used the same kind of language in their 10–2 vote the next day.

“This is actually [still] a good win,” said Jeff Kay, a board member.

But one of the two “no” votes on the board said the transit agency was not getting the best deal.

“The only issue facing me is whether the MTA is getting a fair market deal for its property,” said board member Mitchell Pally. “I did not believe it four years ago when I voted against it, and I believe the same thing today.”

Local elected officials were also troubled by the vote.

“This is a massive giveaway of our public assets,” said Councilwoman Letitia James (D–Prospect Heights).

“They’ve reduced the [amount of] affordable housing, the open space is off the table, and the capacity of the railyards is smaller. It’s literally a disappearing act.”

Forest City Ratner Vice President Bruce Bender dismissed the notion that the project was being “bailed out” by state officials.

“This is not a bailout,” he told The Brooklyn Paper. “The changes made this week were necessary to advance this project to closing this fall.

“This is an economic stimulus for the borough,” he added. “If we can put a shovel in the ground, that’s a tremendous thing for Brooklyn.”

Ratner must begin work on the arena before the end of the year or risk a large cost increase when new federal tax rules governing the use of bonds for stadium deals go into effect.

Many merchants support the proposed arena because it is expected to generate lots of foot traffic on the 41 nights when the future Brooklyn Nets are playing at home.

“It’s much needed in the evening hours,” said Alan Rosen, the owner of Junior’s restaurant.

Updated 5:13 pm, July 9, 2018
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Reasonable discourse

No Hand Grab from Dope Slope says:
Now that is an awesome photo of Ratner. Perhaps Joe DePlasco was under the podium
June 25, 2009, 12:44 am
Norman Oder says:
Here’s extensive coverage of the MTA meeting/vote, with video:
http://atlanticyardsreport.blogspot.com/2009/06/mta-approves-deal-10-2-despite-warnings.html

Here's coverage of the ESDC meeting/vote:
http://atlanticyardsreport.blogspot.com/2009/06/ay-project-cost-rises-to-49-billion.html
June 25, 2009, 6:39 am
Peter from Fort Greene says:
I don't see how anyone could be happy with the outcome of these decisions, that is unless you are Bruce Ratner, his investors, and some people who festishize Daniel Goldstein-hating and deplore the people's right to stand up for what they believe in (you know who you are). If this is to go through, this project and it's construction will drag on for an eternity. That means more construction noise and all the hassle that comes with it. That means fewer jobs stretched out over a longer period of time. So much for the employment injection. Maybe the same construction crew can just be stretched out over the length of the project. And it means a crummier product. Where's the affordable housing and when will it be built? Why is the MTA accepting a crappier and diminished subway stop named after an alcohol brand? Why is Brooklyn receiving more ugly architecture from the school of Ratner? This is a sham and a land grab and if you can't see that then you've got your hand in someone's pocket or your head up someone's ...
June 25, 2009, 6:56 am
Lex from Park Slope says:
Is there any doubt, any doubt at all, that the big fix is in?

In the beginning there was the the fig leaf of affordable housing, a famous architect, and big money for the MTA. Some people were taken in.

But now we've got an ugly barn of an arena, zero affordable housing, and a pittance for the MTA. And we're supposed to give Ratner a tax exemption for the privilege of screwing us?

This was corporate welfare from the beginning, a sweetheart deal for one of Bloomberg's pals. Anyone who can't see it for what it is is blind.
June 25, 2009, 10:46 am
Develop AY for ALL from Prospect Heights says:
Alan Rosen, the owner of Junior’s restaurant and other business owners; keep supporting this give-a-way of MTA property to the rich developer & you'll find boycotts of your businesses... when the state uses eminent domain to seize peoples PRIVATE property with NO real scrutiny and we the public TAX payers get NO benefit then be prepared for the repercussions.... loss of business....
June 25, 2009, 5:47 pm
common sense from bay ridge says:
You and the other 19 members of the Flat Earth Society can boycott all you like, while 15k others (like me) are patronizing the local shops and restaurants. Enjoy your rat infested wasteland for a few more weeks because change is coming!!
June 26, 2009, 12:03 am
freddy from slope says:
Develop AY for ALL:

If the Criminal statutes dont stop the MTA.
If the Civil statutes dont stop the MTA.
Then the social statutes(ones we get to write/enforce) should kick in.

That list should include(to start with):

Juniors
Sids
Nu Hotel
New York Marriott at Brooklyn Bridge
LIU
Polytech
BAM
June 26, 2009, 12:15 am
Paul from Park Slope says:
Things to do: Make then cancel multiple reservations (with appropriate timing, of course) at Juniors (do they even take reservations??), Nu Hotel, the Marriott, and BAM
Go into Sids and ask for directions to Home Depot (not Lowe's, Ratner has that)

Write to Poly and thank them for ditching the biotech industry and costing Brooklyn billions in tax revenue to go with Ratner's Metrotech failure (home of this paper...)
June 26, 2009, 7:27 am
al pankin from downtown says:
good the state should help ...what develop don't destroy has destroyed is the original plan which would have given the area the boost it needed with a high end development. with the endless frivilous lawsuits, the downturn in the economy we will have a watered down project...the original plan would have been well under way.
June 26, 2009, 11:49 am
mike from Cobble Hill says:
How many of these posts are from dddb? you can just smell the bs seeping out as you read them. its rediculous.

So the 50 people that are against jobs and affordable housing wont patronize the businesses that stood up for economic development. Big deal. When atlantic yards is finished there will be over 5000 new apartments filled with people that will. Not to mention the arena that will have tons of people coming in to give business to all the local merchants.

this is the best thing that has happened to this borough in a very long time, dddb is the worst.
June 26, 2009, 5:03 pm
Judah Spechal from Bed-Stuy says:
Mike from Cobble Hill you said it well. The anti-arena crew (DDDB), grass-root people??? are now calling for the destruction of local businesses because they dare to have an opinion different than theirs. I am awestruck that people who profess their love for this borough. Their love for the small folks would makes calls to destroy local businesses. Tell me something you wackos. When you boycott these local businesses exactly who is going to suffer? The owners, I strongly doubt it they are business-people. Maybe- a few people missing their favorite dishes?? I doubt it they'll make their way to Manhattan. Oh guess who is going to get hurt the employees of these businesses. They are going to loses their jobs!!
But I guess that 's in keeping with your real mission.
June 27, 2009, 9:11 am
freddy from slope says:
oh my judah:

once again, you rant incorrectly.

most of the businesses who testified have been the recipient of donations, long term leases (sods), etc from ratner. they are not your average business. and as such dont qualify as representative of broad-based support from the community.
June 29, 2009, 10:12 am
Freddy from Bed-Stuy says:
Oh my Freddy:

Once again, you rant without logic.

You said:
"...and as such dont qualify as representative of broad-based support from the community".

Who elected you Freddy, to make that decision? Might I remained you my dear friend that you are 1 of 2.6 million Brooklynites? Logic my friend logic!

So Ratner has been paying Junior's under the table? Junior's? That's serious! Where's the evidence? Logic Freddy logic!

Beyond that you, deny the fact that there is little foot traffic for many of these businesses in the area, especially the evenings? You are making feel like Mr. Spock Freddy.

Furthermore, when you boycott these local, local Brooklyn small businesses, who employ local, local Brooklyn people. Who will lose their jobs. Does that not matter to you? You are calling for the destruction of local Brooklyn Businesses??? Logic!

If this was a Western Freddy, the
lot of you would be placed on that last stagecoach out of town.There's the logic!

This is not your sandbox Freddy. You ain't shuttering it down Brother! Very logical!

So boycotts, DDDB buying stock in FCR, & offering $120 million dollars for the site. Is there no length you anti arena folks will go to keep the unemployed jobless? Very illogical!
June 29, 2009, 12:01 pm
Judah Spechal from Bed-Stuy says:
Oh my Freddy:

Once again, you rant without logic.

You said:
"...and as such dont qualify as representative of broad-based support from the community".

Who elected you Freddy, to make that decision? Might I remained you my dear friend that you are 1 of 2.6 million Brooklynites? Logic my friend logic!

So Ratner has been paying Junior's under the table? Junior's? That's serious! Where's the evidence? Logic Freddy logic!

Beyond that you, deny the fact that there is little foot traffic for many of these businesses in the area, especially the evenings? You are making feel like Mr. Spock Freddy.

Furthermore, when you boycott these local, local Brooklyn small businesses, who employ local, local Brooklyn people. Who will lose their jobs. Does that not matter to you? You are calling for the destruction of local Brooklyn Businesses??? Logic!

If this was a Western Freddy, the
lot of you would be placed on that last stagecoach out of town.There's the logic!

This is not your sandbox Freddy. You ain't shuttering it down Brother! Very logical!

So boycotts, DDDB buying stock in FCR, & offering $120 million dollars for the site. Is there no length you anti arena folks will go to keep the unemployed jobless? Very illogical!
June 29, 2009, 12:02 pm
bklyn4ver from gowanus says:
I hate it when I have to read really long comments, so a lot went past me here. Ratner is getting sweetheart deals and that is a fact. Atlantic Yards will create havoc with traffic that is already bad, and that is a fact. Eminent Domain is being used to create huge profits for a developer, not for the food of the people. And we're getting a bait and switch, too - no more world-architect GEHRY. Even if you like Atlantic Yards, you have to admit that there is a lot of stuff going on with it that are very questionable to freedom-loving people who believe in democracy and fairness to the community.
June 29, 2009, 1:35 pm
freddy from slope says:
hey judah, part of the new journalism?

i said "most". you seem to have ignored that.

as usual.

and why not let these businesses/institutions know you are voting with your wallet?

i have sent more than a nominal number of people to the "new york marriott at brooklyn bridge."

no more.

and if you listened to the juniors speech at the recent hearings you might be singing a different tune. or at least trolling at a different pitch.
June 29, 2009, 4:41 pm
Judah Spechal from Bed-Stuy says:
Freddy am sure you are a nice dude. I bet these business will do fine without you. So will the rest of Brooklyn when the arena forces all of you to Staten Island. There won't be any out of scale development out there. I'll bett on that.
I'll even help you anti-arena folks pack.
June 30, 2009, 12:23 am
Steve Nitwitt from Flatbush says:
Hey Bruce, let's hug and Norm wants a big one 2
June 30, 2009, 1:13 am
No Hand Grab from Dope Slope says:
Ratner says there was "shrinkage."
June 30, 2009, 2:38 am

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