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May 13, 2009
The Perils of Public-Private
The NY Observer
By Eliot Brown
While the effort to rebuild the World Trade Cetner site has become the poster-project for the pitfalls with public-private development deals — especially when the economy sours and the private partners seek to renegotiate subsidies and contracts — Bruce Ratner's controversial Atlantic Yards megaproject is next in line:
The imbroglio downtown brings into glaring view a flaw common to public-private development deals in New York, a city where progress on large-scale projects so often proves elusive. Struck in strong economic times under aggressive assumptions, agreements on large government-administrated developments almost inevitably falter when the economy shifts, causing private developers to petition the public sector for new concessions or subsidies to keep the deals alive. The result is a system in which large projects seem to rarely provide the public with the value initially advertised, at least not within the time frame once imagined.
While the World Trade Center is by all measures an extreme example, with a host of other factors contributing to the mess, this pattern appears again and again in a glance at some of the city’s largest real estate projects on public land in recent years.
In Brooklyn, at the imperiled $4 billion Atlantic Yards project, developer Forest City Ratner is negotiating with a host of agencies to delay or decrease its hundreds of millions in obligations to the public sector, as the viability of the project is now threatened.
Posted by lumi at May 13, 2009 6:31 AM