February 26, 2009
Why Brooklyn arena tax revenues likely would be lower than projected (and why the IBO should take another look)
Atlantic Yards Report
Have you been wondering what gives with Norman Oder's unflagging obsession with NJ Nets attendance figures? Is the "Mad Overkiller" unable to ignore any of owner Bruce Ratner's exaggerations?
Today's post reveals the method to his madness:
New York City's Independent Budget Office (IBO) may not be ready to recalculate a cost-benefit analysis for the planned Atlantic Yards arena, but there's surely a reason to do so, because one key statistic has likely changed, and one key assumption was likely wrong from the start.
As I describe below, that could mean a 23.2% decline in expected new spending, and a significant--if not quite as high--decline in sales tax revenues. If so, there'd be even more evidence that the arena would represent a loss to the city rather than, as previously analyzed by the IBO, a "modest fiscal surplus."
And it would be another reason to tilt the balance between public and private benefit from the project....
The key assumption is that current NJ Nets fans would attend games in Brooklyn. However, if that reasoning was specious to begin with and attendance keeps dropping, the prospect that NYC would capture enough sales tax revenue from Jersey fans to make the project a net gain for the city pretty much goes down the tubes.
Click here to read the article as Oder walks readers through the math.
NoLandGrab: It's pretty much a given that these projects never pan out like the politicians promise, but very few reporters set out to try to prove it before the fact.
If the justification for hundreds of millions of dollars of direct cash subsidy is based upon this house of cards, Oder is right, it's time for the City to square with the public, especially during this fiscal crisis.
Posted by lumi at February 26, 2009 5:38 AM