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June 17, 2008
It came from the Blogosphere...
transitblogger.com, Atlantic Yards Rally A Sham?
Reaction to last week's Brooklyn Paper editorial:
I truly feel bad for the people who have already been or will be forced out due to this project. While the amount of jobs such a project could possibly bring to the local economy, it is nowhere near enough to justify how this project was originated out of greed & not necessity. Brooklyn does not need the New Jersey Nets & I’d be willing to bet many don’t want them if they had the choice. As usual in situations like this, money talks & the desire of the people gets swept under the rug.
Gideon's Trumpet, In Pursuit of the Free Lunch
One blogger explains how public funds are diverted to free lunch for developers by way of triple tax-free bonds. Naturally, Atlantic Yards is the poster project:
And in New York, we learn from today’s New York Times (Charles V. Bagli, A Question Mark Looms Over 3 Expensive Projects, June 14, 2008, at p. A17), that the promoters of Barclays Center, “expected to be the most expensive arena in the world,” and surprise, surprise, the folks behind the Atlantic Yards project in Brooklyn (see our blog of March 22, 2008, Another Big Redevelopment Project Down the Tubes?) are getting bent out of shape because — are you ready? — Uncle Sam, meanie that he is, is no longer enamored of letting them finance their multi-hundred-million-dollar stadiums with tax free bonds, and is contemplating new regulations that would make interest on bonds used to finance such projects taxable, the same as interest on all other private bonds. Which means that if Uncle gets his way, the owners of big-league sports stadiums may actually have to pay for their own ball parks. Oh the horror of it!
Gumby Fresh, Moderately Epic Return To The Arena-Blogging Fray
"Freshie" gets his two cents in under the wire on Bruce Ratner's desire to use triple tax-free bonds to finance the arena and "norman oderizes" yours truly and pontificates on the Mets in the process.
In any case, if I have any overriding quibble, it's that we're still seeing the financing as this kind of binary, on/off-type creature. FCR is probably intermingling its returns from the various projects at the Vanderbilt Rail Yards site and its surroundings as much as it intermingles the PR. The opportunities for bits of the AY project to cross-subsidise each other, much as bits of a sports teams operations cross-subsidise each other, and bits of wealthy sports teams owners holdings subsidise each other, are legion. Changes to the ways that one component raises financing have subtle knock-on effects on FCR's profits rather than one catastrophic result.
Given that Oder's numbers show the arena project throwing off decent amounts of cash, even under some fairly conservative assumptions, these hikes in debt service costs mostly eat into FCR's returns on the project, or at least the returns of the Nets owners and the stadium's economic owners.
Community Benefits Agreements, More on Atlantic Yards, the IRS and tax exempt bonds
The blog that monitors Community Benefits Agreements (CBA) across the nation is keeping close tabs on Atlantic Yards and Norman Oder's coverage of developer Bruce Ratner's plan to reap the most benefit from the project through tax-free bond financing.
Posted by lumi at June 17, 2008 4:08 AM