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October 21, 2008

New IRS rules stoke Atlantic Yards fight

The Internal Revenue Service issued rules Tuesday on whether the Nets basketball arena planned for Brooklyn can access $800 million in triple tax-free bonds.

Crain's NY Business
by Erik Engquist

The Internal Revenue Service issued rules Tuesday that dictate whether the Nets basketball arena planned for Brooklyn can use $800 million in triple tax-free bonds. The developer, Forest City Ratner, says it can; arena opponents say it cannot.

A layman’s reading of the IRS rules seems to support the position of the developer and its partner in state government, the Empire State Development Corp.

The issue—which like everything else concerning Forest City’s Atlantic Yards project will probably be decided in a courtroom—could determine whether the arena gets built. Forest City has said it could get private financing to build the $950 million venue, but that might not be possible in the current credit market.

The IRS rules say one condition that the arena must have met is that “a governmental person took official action evidencing its preliminary approval of the project before October 19, 2006.” The board of ESDC, the state’s development agency, approved the general project plan of Atlantic Yards in July 2006.

But the arena’s opponents will likely challenge that stipulation.

“The general project plan wasn’t legally binding, and it wasn’t anything that [Forest City Chief Executive Bruce] Ratner could legally rely on to do his project,” said Daniel Goldstein, a spokesman for project opponents.


NoLandGrab: So if Atlantic Yards already had "preliminary approval" in July of 2006, why did we all stand in line for hours for the public hearing for the Draft Environmental Impact Statement on August 23, 2006, endure a fractious, mismanaged hearing, and submit volumes of written testimony?

We knew the whole process was bogus, but this takes the cake.

Posted by eric at October 21, 2008 9:41 PM