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September 7, 2005

DDDb Press Release: MTA Set to Accept Low-Ball Bid From Bruce Ratner

Ratner Nickel-and-Dimes Taxpayers With Brooklyn Railyard Bid Well Below Competitor Extell's Offer and MTA's Appraised Value
What is Ratner's Profit for His Atlantic Yards Project?

NEW YORK, NY—According to a report in today's New York Times the Metropolitan Transportation Authority (MTA) is preparing to accept Bruce Ratner's approximate $100 million offer for the 8.3-acre Vanderbilt Yard in Brooklyn, which would comprise a portion of Forest City Ratner's (FCR) proposed Atlantic Yards development plan.

The MTA has appraised the property at $214.5 million. The Ratner offer is substantially below the MTA's appraisal and well below the $150 million cash offer made in July by Extell Development Company.

"We know that Ratner stands to make a huge profit on Atlantic Yards, something on the order of $1 billion, yet he is determined to rip-off the straphangers of New York City by nickel-and-diming them. He refuses to come even close to the MTA's appraised price on this valuable piece of property, and the MTA is willing to abet this. Why isn't the MTA demanding full market value? The pungent smell of favoritism continues to waft through city air," said Develop Don't Destroy Brooklyn spokesman Daniel Goldstein.

The MTA has released Extell's profit projections, but has inexplicably not released Forest City Ratner's (FCR) projections or pro forma income statement.

"We call on the MTA to immediately release FCR's profit estimates, as contained in their proposal." Goldstein said. "It's insulting to New Yorkers that after two years of negotiations and an additional 45-day grace period, Ratner continues to low-ball transit riders. He must pay the appraised value to help fund our transportation system. The MTA has a lot of explaining to due if this does not occur."

At the May 4, 2004 City Council Economic Development Committee hearing FCR Executive Vice President Jim Stuckey made a promise that the company is apparently unwilling to meet: "What I will say to you is that for the land, the public land, the MTA land, is that, what we have agreed to is that we will lease or buy that land at the fair market value… by whatever independent process that they normally use."

FCR's offer is less than half the MTA's appraised value.

The Times also reported that the MTA might call a special meeting next week to expedite an approval vote for FCR's low-ball bid instead of waiting for their scheduled end of month board meeting.

"This tells us that Ratner is prepared to make a bundle off the backs of the taxpayers and straphangers and that the MTA has never truly wanted an open bidding process. By holding a closed and rigged bidding process, granting special treatment to FCR, relegating competitors to the sidelines and refusing to ever meet with Extell, the MTA has once again agreed to the lowest offer for their property," said Goldstein. "Its time for our public officials, agencies and our public interest organizations, many of whom sued the MTA for taking the low bid on the West Side railyards, to raise their voices and consider suing to protect the public from the MTA's mismanagement and Ratner's continued feeding at the public trough."

If the MTA and FCR reach an agreement, their deal would not close for at least six months, which is the earliest the state mandated environmental review process would reach a conclusion. The MTA risks never seeing their deal close as Ratner's project will face legal challenges, including a challenge to the state's use of eminent domain, which could take many years.

Goldstein added, "Ratner wants the taxpayer to pay and pay and pay, for a meager return for the public and a mega return for his real estate firm." The $100 million low-ball deal comes one day after the City's Independent Budget Office (IBO) released an incomplete and exaggerated report, based on questionable assumptions, projecting a miniscule surplus for New York City from Ratner's arena.

The IBO study fails to consider additional "extraordinary infrastructure" costs, covered by taxpayers, as identified in the Memorandum of Understanding between the city, state and FCR. The FCR bid details these costs to be at least $163 million. Notably, the IBO refused to estimate revenues for the much larger development of 17 towers associated with the arena, citing "methodological limitations." Said Goldstein, "The translation is that the projections of public revenue in reports written by Ratner's paid consultant, Andrew Zimbalist, are purely speculative. That means public backers of Ratner's plan, such as Mayor Bloomberg and Governor Pataki, have based their support on biased, commissioned speculation and have failed to protect the public trust."

Posted by lumi at September 7, 2005 8:38 PM