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February 22, 2006
nolandgrab - could you clarify please?
Sorry to say, NoLandGrabbers don't check DailyHeights as often as they should, otherwise the discussion around one reader's confusion over last Friday's super-post on the luxury-housing market would not have gone on so long.
Thanks to everyone who explained how a drop in the luxury-housing market would not necessarily cause Bruce Ratner to lose his shirt on the deal, and that a "Bruce Ratner white elephant" means that taxpayers are likely to pick up the tab, with municipal and state agencies becoming tenants (thus subsidizing the project on the back end, even though the project has already received every subsidy available on the front end).
Basically, the lack of demand for Class A office space has forced Ratner to convert much of the planned office space to luxury condos (he has reserved the option to change that back). A subsequent drop in the luxury housing market would not leave much flexibility regarding the financial health of the project. A nationwide increase in construction costs, related to demand for labor and materials to rebuild the Gulf Coast, could make things even worse.
The point isn't that opponents of the project are contradicting themselves, debating affordable vs. luxury housing and gentrification vs. diversity. As Councilwoman Letitia James likes to say, these are "false dichotomies."
Keeping an eye on market forces and Ratner's changing configuration of the project (BTW: Ratner hasn't released the profit projections that accompanied his MTA bid for the railyards) makes Brooklynites as concerned as Ratner must be about the economic success of the biggest private project in the history of Brooklyn.
Ratner is known for making bold moves, but what is the risk to him if the projects are heavily subsidized and eventually are "carried" by the public until market forces are more favorable?
These issues and questions must be taken into consideration when pondering the big question: do the project's benefits outweigh it's negative impacts?
Posted by lumi at February 22, 2006 9:04 AM