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June 6, 2007

Develop Don't Destroy Brooklyn Press Release:
DOCUMENTS SHOW MORE THAN HALF OF THE FINANCING FOR FOREST CITY RATNER'S ATLANTIC YARDS PROJECT IS GOVERNMENT BACKED

Project Seeks At Least $1.4 Billion in Tax-Exempt Housing Bonds Gobbling Up Available Housing Funds From All Over New York City

BROOKLYN, NY— Atlantic Yards has always been sold as basically a privately funded project by its developer Forest City Ratner and government officials from Mayor Bloomberg to former Governor Pataki. The reality is that more than half of the project will be government backed.

Documents from lawsuits and elsewhere, uncovered and analyzed today by journalist Norman Oder on his Atlantic Yards Report, reveal that including a Ratner request for at least $1.4 billion in tax-exempt housing bonds, at least $637 million in tax-exempt arena bonds, at least $205 million direct cash subsidy from New York City and $100 million direct cash subsidy from New York State, at least $2.34 billion of the $4 billion project has government backing.

"Despite the developer's and government's claims to the contrary, we've always known that the taxpayer would shoulder the lion's share of the cost of Ratner's Atlantic Yards project; now it has been confirmed in government documents," said Develop Don't Destroy Brooklyn spokesman Daniel Goldstein.

The trouble with Forest City Ratner’s extraordinary $1.4 billion housing bond request to New York City’s Housing Development Corporation (HDC), is that New York City is facing an enormous deficit in the tax-exempt bonding the developer is seeking. The impact this deficit will have on “affordable” housing development in New York City and in the Atlantic Yards project could be devastating. The delay in constructing affordable housing in Atlantic Yards that the deficit is likely to cause was also broken in a story on the Atlantic Yards Report today. On his blog, Mr. Oder wrote that on May 24, city Housing Preservation and Development (HPD) Commissioner Shaun Donovan drew a stark picture in his testimony in front of the House of Representatives’ Ways and Means Committee. Mr. Donovan said: “New York City is facing an immediate crisis in private activity bond volume cap, which we expect to deplete before the end of June. Without additional volume cap, 6,700 units of housing in our pipeline will not be built.”

Those 6,700 units precede the 2,250 “affordable” units promised for Ratner’s Atlantic Yards, involving $1.4 billion in scarce tax-exempt bonds. As Oder points out, neither the developer nor government officials revealed this total until after the project that was approved.

Former City Planning Commissioner Ron Shiffman said, “Forest City Ratner’s project, with already inflated construction costs, would suck up and take away so much funding from other affordable housing projects in New York City. It’s time for Mayor Bloomberg and Governor Spitzer to rethink the Atlantic Yards project, or the Mayor’s PlaNYC 2030 and the City’s housing goals will be seriously jeopardized for years to come even if the bonding volume cap is raised."

“Forest City Ratner would be getting at least $2.34 billion in taxpayer backed government assistance, which is more than half the price tag for Atlantic Yards. At the same time it is now starkly clear that Ratner’s project, with its overly expensive per unit construction costs, would hoard scarce housing subsidy resources from all over New York City,” Goldstein said. “If the project is not rethought, something will have to give, and it seems likely that something will either be massive delays in construction of affordable housing for Atlantic Yards or withdrawn funding for more streamlined affordable housing projects throughout the City.

Posted by lumi at June 6, 2007 9:47 AM