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December 2, 2008

A $950 million arena? Either that cost is bogus (goosed for PILOTs?), AY might now cost $6 billion, or the ESDC math was off

Atlantic Yards Report

The Yankees Stadium deal is being scrutinized because local officials inflated the value of the stadium in order to issue more low-cost federal bonds.

Is Bruce Ratner trying to do the same for a new Nets arena in Brooklyn? If that's the case, then the dramatically escalating cost of Ratner's arena starts to make sense:

Why exactly was the Atlantic Yards arena supposed to cost nearly $1 billion? The numbers just don't compute.

The rapid escalation of the cost of the arena--from $400 million in 2003 to $637.2 million at approval in 2006 to $950 million this year--significantly outpaces local inflation in construction costs.

That leads to some troubling speculations--even if the cost may have dipped a bit recently.

Has entire project cost jumped 50%?

If the $950 million figure is in fact accurate, then the entire Atlantic Yards project has increased in cost nearly 50% from $4 billion, and government oversight agencies should be taking a second look at whether a $6 billion project is remotely viable, as Develop Don't Destroy Brooklyn suggested in June.

Was value of arena inflated?

Alternatively, if the project cost as a whole has not gone up commensurately, the value of the arena may have be inflated by adding improper costs, perhaps in the same way as Assemblyman Richard Brodsky and Rep. Dennis Kucinich have alleged in their recent investigations of Yankee Stadium.

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Posted by lumi at December 2, 2008 4:02 AM