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July 18, 2006
UPDATE 1-NYS agency initally OKs Brooklyn arena complex
Reuters reports on some of the general financial issues:
According to the general project plan, the state and New York City will each contribute $100 million toward infrastructure improvement costs currently estimated at $554.4 million. The rest will be covered by the developer Forest City Ratner Companies (FCEa.N: Quote, Profile, Research) and its affiliates.
Jessica Copen, a spokeswoman at the Empire State Development Corp., said the state will either use cash or sell bonds backed by state personal income taxes for its share of infrastructure improvements.
James Stuckey, president of the Atlantic Yards Development Group, said the $637 million arena will be financed through tax-exempt bonds backed by payments in lieu of taxes.
These so-called PILOT bonds are often used by local governments as an incentive to attract private developers because their payments are lower than what they would have had to pay in real estate taxes.
Some construction costs can also be funded through taxable municipal bonds backed by rent the developer will pay to the state, according to project documents.
Posted by lumi at July 18, 2006 9:00 PM