August 8, 2007
Ratner Clause is coming to town...
Yesterday afternoon's big news was delivered by Crain's NY Business reporter Erik Engquist:
The new agreement also does away with a controversial carve-out that would have allowed developer Forest City Ratner’s planned $4 billion Atlantic Yards project to qualify for 421-a abatements without integrating affordable and market-rate units. The abatements were estimated to be worth about $200 million.
AU CONTRAIRE, MON FRÈRE! Before boasting of the death of the Ratner Clause, other media outlets are reporting differently:
Atlantic Yards Report, AY carve-out shrinks, value halved (?), in city-brokered 421-a reform
Forest City Ratner still gets a deal. Ten days ago, an FCR spokesman had declared a modified carve-out a done deal.
First, Forest City Ratner would still get its tax savings in most buildings without having to change the income mix, thanks to an upward tweak in the bill's definition of affordable housing.
And the developer would still get a tax break for the condo buildings without having to provide affordable housing. That's the premise of the current law, as applied to Prospect Heights, and certainly part of the developer's economic projections when Atlantic Yards was hatched. But no other similarly-situated developer, who planned a project but then saw the law come up for renewal and revision, would get the same deal.
Four or five AY buildings would contain only condos; the "carve-out," as with the current law, would have allowed them to qualify for a 25-year tax break even without including affordable housing. The compromise allows a 15-year tax break but would allow the 25-year tax break if those buildings included 20% affordable for-sale units--a provision that likely would be applied to at least one of those condo buildings.
NY Post, CITY OKS NEW RATNER DEAL
[The compromise] cuts from $300 million to $200 million the exclusive property-tax breaks for developer Bruce Ratner. And the 1,930 condo units would get tax exemptions for 15 years rather than 25.
The exception for Atlantic Yards was reduced in its scope, but not removed, with the added benefit to the development estimated at $150 million, according to a city official. The entire complex, regardless of whether the buildings have affordable units, would qualify for the tax break, though the market-rate buildings would receive the incentive for 10 years less, the city official said. The developer, Forest City Ratner, would be required to build its low- and middle-income units simultaneously with other units in order to receive the tax break.
Opponents of the project said Forest City Ratner should have to abide by the same rules as every other developer in the city.
The NY Times, Bill Aims to Spur Housing for New York’s Poor
The Times highlights the party line, without mentioning that the Atlantic Yards carveout still provides subsidies for Bruce Ratner's controversial project that are not available to other developers:
As for Atlantic Yards, city officials said the new agreement represents a fair compromise. To receive the maximum tax break, 20 percent of the units in any building will have to meet the new affordability guidelines, which are more stringent than those that originally applied. And the lower-priced units will have to be built at the same time as the market-rate units, to insure that they are not put off until the end of construction or never completed.
Develop Don't Destroy Brooklyn, The Ratner Clause Lives
How bad is the Ratner Clause? It is bad enough that those working on pushing it through did not report it accurately to the press . Rather than reporting that this was a new version of the clause still exempting Ratner from providing affordable housing, the press was told that the Ratner provsion had been eleiminated as called for by many elected officials. (see below Crain's article below).
Special catering to Ratner's project has now held the City's housing agenda hostage by resulting in a bill with less positive reform than the the City orginally intended. (see Atlantic Yards Report below).
Either the Ratner provision needs to be eliminated entirely, or the bill must be vetoed by Governor Spitzer
Posted by lumi at August 8, 2007 9:52 AM