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July 27, 2005

DDDb Press Release: The MTA Chooses Exclusive Negotiations with Low-ball Bidder Ratner

In Full Public View the MTA Abdicates Its Responsibility to the Public,
Puts Development at Vanderbilt Yards at Risk, and Ignores the High Bid from Extell

For Immediate Release: July 27, 2005

NEW YORK, NY—Today the MTA Board, led by Chairman Kalikow, voted to pass a resolution to negotiate exclusively with Forest City Ratner (FCR), for the Vanderbilt Yards, over the next 45 days. The resolution precludes negotiations with the other responder to the MTA Request For Proposals, Extell Development Company. The Board stated that it was "disappointed" with the low-ball offer from FCR of $50 million for the MTA's Vanderbilt Yards in Prospect Heights, Brooklyn. Extell had bid $150 million for the 8.4-acre property. The MTA spent less than two days evaluating the Extell bid, and has refused to meet with the company to allow them to make a presentation about their proposal. The Board also ignored Extell's compromise offer to sell one of the Yards' lots, at cost, to Mr. Ratner to build his proposed arena.

"It is unconscionable that the MTA Board has decided, in a pre-determined resolution, to hold negotiations with only one bidder, and the low bidder at that. The MTA has been negotiating with FCR for about two years, and even after that Mr. Ratner low-balled them. We expected the MTA to hold a legitimate bidding process," said Daniel Goldstein, Develop Don't Destroy Spokesperson. "Today they proved that they were always determined to award their property to Mr. Ratner, no matter what purchase price he offered. The only fair result of today's meeting would be to set forth on negotiations with both bidders. Instead the MTA, in full public view, demonstrated that their process was disingenuous from the start. In other words it was completely rigged."

Mr. Kalikow went through contortions to justify the resolution for exclusive negotiations. Most of the Board was silent in discussion before the vote. The only independent voices, non-voting member Mr. Albert and voting member Mr. Pelly, harshly criticized the decision claiming it was irresponsible and consisted of faulty logic if the Board is trying to reach their appraised price of the Yards, which is $214.5 million.

Mr. Goldstein continued, "We have fought for an open bidding process with transparency, and when we finally thought this would occur we were slapped in the face, along with all transit riders. It stinks of corruption, political favoritism, and meddling by the Mayor and Governor. But the MTA made a big mistake today, and took an irrational risk, as they strengthened the lawsuits we will bring against the use of eminent domain."

"In the US Supreme Court's recent Kelo decision Justice Kennedy, the swing vote, in a concurring majority opinion, described a situation where eminent domain would be prohibited. What he described was the designation of favored developer and no legislative planning process. With the MTA's troubling decision today, they made it clear that Mr. Ratner is the favored developer of the MTA, the Mayor and the Governor, and that is strong ammunition for us. To be clear, the fight against the FCR proposal is as strong as ever, if not stronger."

Pending eminent domain legislation, by the US Congress and Albany, may make it impossible for Ratner and the State to use eminent domain for his project, thus scuttling the entire development plan. Also, the the soon to be signed state Public Authorities Reform Act will require the MTA to get full market value for its properties, which could also scuttle the whole deal.

Goldstein concluded, "For the MTA to do right by its riders, and its fiduciary responsibilities, they must rescind their decision today and negotiate with both parties. Anyone can see that an exclusive negotiation would be unlikely to bring the highest price, would be a travesty of fairness, and an abdication of the Authority's responsibility to the public and the communities surrounding Vanderbilt Yards."

Posted by lumi at July 27, 2005 5:21 PM