April 30, 2008
DDDB PRESS RELEASE: City Funding Agreement Casts Further Doubt on Atlantic Yards ‘Affordable Housing'
Allows Lenient Timelines and Minor Penalties;
Reimburses Ratner for Buyouts Made Under Eminent Domain Threat
City Council Committee Hearings Needed to Scrutinize Convoluted City-Ratner Agreement
BROOKLYN, NY— The New York Economic Development Corporation will use $100 million in taxpayer money to reimburse developer Bruce Ratner for the properties he bought, under the threat of eminent domain, for his planned Atlantic Yards arena. Also, Ratner only has to build 300 "affordable" housing units (only 120 for low-income tenants) by the year 2020. That's 10 low-income units per year.
"Ratner's 'generous' buyouts to many property owners threatened by the developer's abuse of eminent domain to build his arena, it turns out, were generously paid for by taxpayers—Ratner paid just about nothing to purchase those properties" said Develop Don't Destroy Brooklyn (DDDB) spokesman Daniel Goldstein. "It is unconscionable and indefensible that the City is giving $100 million of NYC taxpayers' money to pay for Ratner's strong-arm real estate deals."
Norman Oder broke this news today on his Atlantic Yards Report (AYR), revealing these and many other troubling arrangements in the city's Atlantic Yards funding agreement signed with the Empire State Development Corporation (ESDC) in September, but only made public now through a Freedom of Information Law request. Documents show that Ratner purchased properties within the footprint of his proposed arena site, under the threat of eminent domain, for about $103.5 million; but the funding agreement confirms that the developer's "largesse" is non-existent as the taxpayer will pick up $100 million of that tab.
According to AYR's analysis of the funding agreement, Ratner can also get away with no penalty at all as long as he builds 1.5 million square feet of Phase 1 within 12 years—that would be 44% smaller than the Phase 1 promised at the time the project was approved in December 2006. Such a scenario would mean only 300 units of "affordable" housing in 2020, even though the project that was approved envisioned 2,250 "affordable" units by 2016. The extended timeline allowed in a funding agreement with the state and the reduced project size allowed in the city agreement, would also substantially reduce projected tax revenue found in earlier state documents.
There is no timeline whatsoever for the 11 Phase 2 skyscrapers where the bulk of the "affordable" housing had been proposed
The agreement also requires far greater penalties for the developer if he delays or doesn't build his planned arena, than it requires if the developer delays the housing. And all of the penalties are minimal. Ratner is not even required to pay back $105 million of the $205 million in direct city subsidies if he abandons his project entirely.
Councilwoman Letitia James told AYR that the City Council's Contracts Committee and the Economic Development Committee "should look into the deal." James chairs the Contracts Committee
According to the AYR Councilwoman James expressed shock that the damages the developer would have to pay for an arena delay would be higher than for a housing delay, and that all the penalties are so "minimal."
"These funding agreements demonstrate, once again, that the Atlantic Yards proposal is a bait and switch by the developer, the Empire State Development Corporation (ESDC), and the NYC Economic Development Corporation," DDDB's Goldstein said. "What's clear is that the ESDC approved an idea, not a plan; it was content to do so knowing that it could negotiate pretty much anything it wanted to, without oversight, once the project was approved. Of course Ratner had no problem with that either. The convoluted, post-approval agreement between Ratner and the city requires City Council committee hearings."
The new revelations in the funding agreements make this Saturday's community rally—urging Governor Paterson to halt Atlantic Yards subsidies, demolitions and displacement—that much more urgent.
"Each day the facts of the Atlantic Yards bait and switch become more and more astounding. The Atlantic Yards promises were a mirage, so it's time to halt the project before Ratner turns our neighborhoods into a desert, as he is attempting to do," Goldstein concluded.
The City funding agreement with developer Forest City Ratner can be found here: http://www.dddb.net/documents/economics/NYCEDC_FCRAgreement.pdf (The file is 13.5 mb)
Posted by lumi at April 30, 2008 4:33 AM