July 21, 2008
Asking feds not to approve tax-exempt bonds for AY arena, DDDB criticizes city/state letter
Atlantic Yards Report
Norman Oder posted the highlights from Develop Don't Destroy Brooklyn's (DDDB) letter to the IRS, in which the group made the case against reopening a federal tax loophole for Bruce Ratner's Atlantic Yards project.
Some of [DDDB's] criticisms were first reported in this blog: the letter overstates how much land Atlantic Yards developer Forest City Ratner actually controls and it fails to point out that, at least according to available evidence, the foregone property tax might be much less than the anticipated PILOT payment. Also, DDDB points out that the city and state overstate the amount of progress achieved on the project.
At stake is a benefit --the difference between tax-exempt and taxable bonds--to arena developer Forest City Ratner worth an estimated $165 million on $800 million worth of bonds for a $950 million arena. The burden would fall mainly on federal taxpayers--hence the interest of the city and state in getting it passed. Should the “loophole” not be preserved for the arena, there might be increasing pressure on the city and state to increase local subsidies for the facility.
While DDDB’s concerns may be seen as more parochial than concerns about tax-exempt financing for sports facilities expressed by Rep. Dennis Kucinich (D-OH) and Assemblyman Richard Brodsky, the specific criticisms in the letter likely had not been raised previously in direct communication to IRS and the Department of the Treasury.
Posted by lumi at July 21, 2008 5:29 AM