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June 8, 2009
In plain sight: are dramatic re-assessments on arena block a prelude to "gaming" PILOTs to pay off construction?
Atlantic Yards Report
Something is rotten in the state of land valuations in the Atlantic Yards arena footprint.
Will the city’s dubious practice regarding assessments of land for Yankee Stadium--in which the value of the site went up eight times in a single day, using dramatically different land sales as comparables--recur regarding assessments for the Atlantic Yards arena site?
Well, we don't have an assessment for the arena block as a whole, but evidence of questionable decisions by the Department of Finance (DOF) is mounting. For some properties on the block, land assessments--which are a percentage of market value, and rise with the latter--have leaped 17 or 20 or 34 times in one year. Perhaps an oversight hearing is in order.
Meanwhile, Forest City Ratner wants to lower the amount it pays upfront for another piece of the arena block, the Vanderbilt Yard, to a reported $20 million, instead of the $100 million it initially promised.
...I took a look at Department of Finance records myself, and found several questionable aspects:
- some properties have rocketed up more than 17 times market value and assessment just in the past year
- even though official market value may remain below what Forest City Ratner paid for the land--a not uncommon occurrence--the increase in value occurred only recently, several years after the land was purchased, even though city officials say that NYC assesses each property every year
- the increases include land owned by the city that has never been on the market
- while the increase in assessment might be tied to a change in classification, the leap in value sometimes occurs after the change
- the land value under several major neighboring properties--the stores at Site 5, Forest City Ratner’s two malls, 470 Vanderbilt--has remained stable for several years
- anomalies abound; the site at Flatbush and Dean street that formerly housed a Mobil station is valued at more than 50% of the land under the much larger Atlantic Center and Atlantic Terminal malls
NoLandGrab: While Oder's post is dense with numbers, we suggest you read through, because we expect we're going to be hearing a lot more about land-valuation shenanigans in the coming months.
Posted by eric at June 8, 2009 10:53 AM