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DOCUMENTS SHOW MORE THAN HALF OF THE FINANCING FOR FOREST CITY RATNER'S ATLANTIC YARDS PROJECT IS GOVERNMENT BACKED »
June 6, 2007
Privately financed? Court documents finally specify the housing bonds behind Atlantic Yards funding
Another Atlantic Yards Report scoop!
This is a MUST-READ for reporters, government officials, affordable-housing advocates, "liberaltarians," legal eagles and Atlantic Yards junkies and flunkies.
Norman Oder digs deeper and stumbles across one of the documents that everyone has been looking for, and figures out that more than half of the project's financing is government-backed!
When the project hit crunch time, however, before the Public Authorities Control Board's (PACB) 12/20/06 vote, the ESDC gave the PACB some confidential information The ESDC finally offered a more granular explanation of the financing for the $4 billion project: more than half would come either directly from the government or from government-assisted resources:
- $637.2 million in tax-free bonds to finance the arena
- $100 million from New York City (city expenditures are now $205 million)
- $100 million from New York State
- $1.4 billion in tax-free bonds to finance the affordable housing
That represents more than half the project financing. While the $2 billion-plus in government-authorized bonds (housing bonds via HDC and arena bonds via ESDC) wouldn’t represent a direct grant to Forest City Ratner, the bonds would back low-cost mortgages, at a far more attractive interest rate than the developer could find on the open market. That thus would lower the developer’s costs and add to profit.
(How much lower? Perhaps 15%--see below. As the New York Observer reported last week, the privately issued bonds "can save developers 1 to 1.65 percentage points a year in interest.")
Such bonds are so scarce, in fact, that HPD Commissioner Shaun Donovan on May 24 told Congress the city faced a “crisis” threatening to stall some 6700 affordable housing units in the city’s pipeline. And that pipeline precedes the 2250 units promised for Atlantic Yards.
Posted by lumi at June 6, 2007 9:33 AM