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June 20, 2009
The four ways FCR could "railroad" (as per New York magazine) the MTA on the value of the Vanderbilt Yard
Atlantic Yards Report
How will the MTA screw taxpayers for the benefit of Bruce Ratner? Let me count the ways. Here are four of them from the Atlantic Yards report as commentary on the New York magazine item by Chris Smith, Smith: Ratner Close to Railroading MTA on Atlantic Yards.
Smith cites two examples of such railroading--the cash payment and the quality of the replacement railyard--and they're worth pointing out. However, as I note below, I think there are two more examples.
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The key piece is the closing paragraph, in which Smith suggests that the public commentary at the MTA meetings next week will be irrelevant, and implies that efforts by elected officials to have the MTA delay the vote would come to naught.
Why? Forest City Ratner doesn't lobby the MTA but, according to a government insider, "just try to do business right through the governor, and expect that the governor will tell the MTA what to do.”
So it's up to Governor David Paterson, who's been AWOL on AY, with many other things on his plate.
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Reduced price: railroad #1
Smith writes: But the MTA appears willing to settle for a drastically reduced price in order to salvage some kind of short-term development at Atlantic Yards: Sources say the new price tag is likely to be either $20 million upfront or $10 million per year for ten years.
Only the former had been reported. While $10 million a year would mean a lower down payment, it might mean a steadier delivery of the entire $100 million. But why, the MTA must explain, does it think that the segment Forest City Ratner wants is worth only $20 million?
Cheaper permanent yard: railroad #2
Smith writes: As disappointing as the cash may turn out to be, there’s another significant change in the works. “The thing to watch is whether the MTA gets screwed on the rail yards,” one party to the negotiations says. Ratner had agreed to build a new and improved rail yard for the LIRR. But he’s trying to cut back there, too, possibly delivering a new yard with 25 percent less capacity than the existing facility. “That would be a real loss,” the official says. “Ratner is supposed to build a rail yard that’s worth $200 to 300 million.”
Well, it's already been reported that the permanent railyard would have seven tracks rather than the promised nine tracks. The new railyard was said by FCR to be worth $182 million, but maybe inflation would take it over $200 million. The MTA has not provided a figure on the value of the replacement railyard. Nor has it revealed whether the new permanent railyard would have lesser capacity.
The other two examples: original cost and temporary yard
One of the other examples of "railroading" is simply the deal the MTA originally cut: accepting $100 million in cash for a site appraised at $214.5 million, and not questioning FCR's dubious math on the value of the extras.
The other involves the quality and persistence of the interim temporary railyard at the site. Once, this railyard, with space for 30 fewer cars, was supposed to operate for 32 months before being replaced by the higher-capacity permanent yard.
Now, there are hints--though we can't be sure--that the temporary yard might be delayed much longer and might not ever be replaced.
Posted by steve at June 20, 2009 11:20 AM