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October 20, 2006
"Atlantic Yards" Economic "Impact" Analysis Memo
The one thing that all of these reporters below are too polite to point out is that this document, dated October 18, is written after the fact and appears to be what is commonly known as a CYA memo.
The memo contains charts but doesn't include any documents from the original study cited in the General Project Plan. Does this study actually exist? If so, then why were the results released in a memo? We're not experts here, but we're impressed by the opacity of, and foot-dragging by, the Empire State Development Corporation.
VillageVoice.com, Power Plays, Secrets of the Ratner Plan Revealed! (Not)
Neil deMause explains what is and isn't in the "Atlantic Yards Economic Impact Analysis" released earlier this week.
What the ESDC actually made public yesterday was a seven-page memo from staffer Kathy Kazanas, listing about $1.2 billion in new city tax revenues, and $2.3 billion in state tax revenues, that are projected to flow from the project.
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There's no indication whether the state's number-crunchers accounted for leakage (money spent at sporting events is more likely to leave the local economy) or the substitution effect (Brooklynites buying Nets tickets might cut back on their monthly cheesecake tab at Junior's), and the analysis appears to assume that all the Nets players would relocate their homes from New Jersey to New York, for starters.
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A bigger problem, though, as Atlantic Yards Report's Norman Oder notes, is that the ESDC memo entirely omits any mention of public costs, whether the $200 million (or is it $1.9 billion>) for in direct subsidies for the project, or the increased cost of providing city services to Ratner's projected 6,800 new households.
The Real Estate Observer, Yards to Offer Good Jobs (If You Can Get One)
Observer reporter Matthew Schuerman focused on the jobs figures revealed in the analysis:
The Empire State Development Corporation released figures this week that showed just how many maintenance and security jobs the residential parts of the complex would provide: 343.
NoLandGrab: One of the reasons an accounting of the public costs of Atlantic Yards is important is so the public can learn if the money could be better spent to create more jobs.
The NY Times, Study Shows Data for Claim of Atlantic Yards’ Benefits
Times reporter Nicholas Confessore outlines the benefits touted by the study and later follows up with the catch:
Perhaps more significantly, the study also excludes public subsidies for the project’s planned 2,250 units of housing priced below market rates. Those subsidies are still under negotiation, but could substantially increase the public cost of the project.
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“That is a skeleton projection of state and local tax revenue,” said Assemblyman James F. Brennan of Brooklyn. Mr. Brennan has requested a detailed accounting of the project’s financial return to Forest City — figures not covered in the new study — and for the costs of each element of the mixed-use project, like the arena.Such requests have so far been rebuffed. Mr. Brennan said he believed that a fuller financial picture might undercut supporters’ contention that the project’s enormous size and density could not be reduced without endangering its economic viability.
To test your gag reflexes, we highlight the requisite quotes from the Ratner camp:
Jessica Copen, a spokeswoman for Mr. Gargano, maintained yesterday that the documents were privileged, but said the agency had decided to make them public this week as a gesture of “good government.”
“We are in the midst of a public review process and have provided to relevant agencies required information involving the Atlantic Yards project" — Joe DePlasco, Ratner spokesman
Atlantic Yards Report, The ESDC acknowledges some costs, Times offers some skepticism, story downplayed
Norman Oder explains the ESDC's follow-up to the memo summarizing the study (emphasis added):
More than a day after the Empire State Development Corporation released a sketchy fiscal impact analysis for the Atlantic Yards project, the agency offered some backup calculations--which do allow for nearly $500 million in costs, but still fail to fully account for all costs, including housing subsidies.
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How did the agency reach a $1.4 billion net revenue calculation? Copen responded by citing both the document released as well as other ESDC documents. Some $845.5 million includes the fiscal benefits of operations and construction activity for New York City and the Metropolitan Transportation Authority. The $1.1 billion is net revenue to the city and state from the General Project plan. Total: $1.9 billion.Fiscal cost for the project for NYC + NYS:
NYS sales tax exemption $20.0 million
NYC sales tax exemption $20.0 million
MTA sales tax exemption $ 1.9 millionNYS mortgage recording tax exemption $ 17.8 million
NYC mortgage recording tax exemption $181.4 millionBond Financing
NYS $138.3 million
NYC $113.5 millionTotal NYS $176.1 million
Total NYC $316.7 millionTotal: nearly $493 million (a figure cited in July by the Bond Buyer)
Subtract that from $1.9 billion and you get $1.4 billion. However, as noted, that leaves out all sorts of costs for schools, sanitation, and public safety--not to mention other subsidies.
NoLandGrab: Public benefits, $1.9 billion; incomplete accounting of public costs $500 million; developer profit $1 billion(?); "brutally weird" public process... priceless.
Posted by lumi at October 20, 2006 7:24 AM