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December 13, 2006
DDDB PRESS RELEASE: The Missing Half-Billion Dollars
ESDC Cuts Atlantic Yards Revenue Projections by One-Third
Atlantic Yards Financial House of Cards Continues to Crumble, Emphasizing Need for PACB to Postpone Its Vote
NEW YORK, NY-- The Empire State Development Corporation’s (ESDC) new net tax revenue projections for the Forest City Ratner Atlantic Yards development proposal have been reduced since July from $1.4 billion to $944 million--a nearly one-third decrease, according to ESDC documents examined by journalist Norman Oder in his Atlantic Yards Report blog.
This nearly one-third decline in new net tax revenue goes unexplained in the modified General Project Plan approved in fifteen minutes by four members of the ESDC board and its Chairman Gargano on December 8th. The new revenue number is still drastically inflated as the ESDC does not include numerous public costs and subsidies such as: public utility relocation, “extraordinary infrastructure costs,” housing subsidies, schools, sanitation, emergency services, hospital, police, fire, and costs from increased traffic.
When those public costs are accounted for, which the ESDC has refused to do, the $4 billion development plan might not provide any new net tax revenue.
“This new information shows that the Empire State Development Corporation is incapable of being a transparent, honest broker and shines a glaring spotlight on the fact that the Atlantic Yards plan is a financial house of cards. There has never been any reason to believe the ESDC’s Atlantic Yards financial projections,” said Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein. “Speaker Silver, Majority Leader Bruno, Governor Pataki, and Comptroller Hevesi cannot possibly allow a PACB vote on Atlantic Yards next week when the financials on the project are so precarious and lacking in reality. With this bombshell half-billion tax revenue cut one wonders: Why should the public and elected officials trust anything that comes out of ESDC headquarters regarding Forest City Ratner’s Atlantic Yards?”
Oder also uncovers other drastic cuts in job projections, leading to more doubt about the ESDC’s and Forest City Ratner’s claimed public benefits.
In his article, “The missing half-billion: ESDC cuts projected AY tax revenue by nearly one-third,” Oder writes:
The Empire State Development Corporation (ESDC) didn't shine a light on it, but nearly half a billion dollars in projected public revenues just vanished.
The revised Atlantic Yards General Project Plan (GPP) issued last Friday by the ESDC contains one very significant change from the document released in July. Projected net new tax revenues have plummeted by $456 million. That's almost a one-third decline from the $1.4 billion figure announced five months ago.
That's much more than a rounding error. And it vastly outpaces other changes regarding Atlantic Yards. After all, since July, the project's cost went down 5% (from $4.2 billion to $4 billion), and its size declined 8% (from 8.659 million square feet to 7.961 million sf).
So how could the revenues drop so much? The change calls into question the ESDC's methods, and its candor, since no supporting study has been released…
The full article can be found here: www.atlanticyardsreport.blogspot.com/2006/12/missing-half-billion-esdc-cuts.html.
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In other Atlantic Yards financial news:
Still unknown is how much the triple-tax-free arena bond debt service will be, how much the Payments in Lieu of Taxes (PILOTS) will be, and how much the entire housing subsidy package will be, yet the project still is on the agenda for the December 20th Public Authorities Control Board meeting.
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#30
Posted by lumi at December 13, 2006 10:07 AM