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December 20, 2007

Deals that lead to lost property taxes

NY Daily News
By Juan Gonzales

New York City lost more than $100 million in property taxes last year because of privately negotiated deals with some of the world's richest companies.

The companies - including behemoths like JPMorgan Chase, Pfizer and NBC - have paid a fraction of their normal property tax bill for years through these little-known deals, commonly called PILOTs (Payments in Lieu of Taxes).

In case you don't already know, Bruce is #1!

The undisputed king of PILOTs is real estate developer Bruce Ratner. His Forest City/Ratner firm paid the city $9.7 million last year for half a dozen commercial buildings the company owns in downtown Brooklyn. That sounds like a lot of money - until you realize it's only one-third of the company's actual $26.3 million property tax bill.

That doesn't even count PILOTs that have yet to kick in for Forest City's Atlantic Yards mega-project.

Forest City spokesman Loren Riegelhaupt defended the company's success at landing PILOT subsidies.

"A lot of those buildings in MetroTech were constructed when downtown Brooklyn was not what it was today," Riegelhaupt said. "Many businesses were fleeing to New Jersey in the 1990s, and we were willing to invest in that area when others wouldn't."

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Develop Don't Destroy Brooklyn notes Ratner's excuse for receiving PILOTS for MetroTech and wonders if the developer can come up with another excuse for Atlantic Yards:

Yes, Ratner's folks should be proud of how great they are at feeding at the public trough. Forest City Ratner's defense of their use of PILOTs for Metrotech is that in the 1990s "downtown Brooklyn was not what it was today." Then what, exactly, is their defense for receiving PILOTS for their Atlantic Yards project near that Downtown Brooklyn which is what it is today -- a booming real estate market where many are willing to invest.

NoLandGrab: Obtaining any form of public subsidy is Ratner's modus operandi projects and is one of the keys to the company's profitability. As Cooper Union professor Fred Siegel told the Cleveland Plain Dealer, Bruce Ratner is "the master of subsidy. No one does it better. That's not a flat-out criticism of him. It's just that he never builds without someone else taking the risk." That special someone would be the taxpayers.

Posted by lumi at December 20, 2007 7:40 PM