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August 21, 2009

What if the public authorities reform bill had passed before the MTA revised the Vanderbilt Yard deal?

Atlantic Yards Report

Norman Oder imagines a world in which New York State government isn't totally corrupt.

So, what if the [MTA] board members had a strongly enforceable fiduciary duty--as opposed to the weaker one imposed by the MTA bailout bill--and felt compelled not to budge from the original $100 million deal, which itself was a compromise?

(Remember, the land was appraised at $214.5 million with the cost of a replacement railyard factored in, and rival Extell bid $150 million, though it was not allowed to flesh out its bid. Forest City argued that the value of its bid was much larger than the appraisal, though it's claims were questionable.)

Mayor Bloomberg, who wants the project to go forward--because of his belief in megaprojects, the desire to cut a ribbon, love for pro sports, coziness with the real estate industry?--would've had to spend some political capital and actual capital.

He could have done so. After all, he's the guy who put an additional $105 million in city funds into the project in 2007. The City Council doesn't have a line item veto.

Bloomberg coming clean

But Bloomberg would've had to have been more open in finding this new money--at least $100 million. He could have cut library hours. He could have continued to cut the starting salaries of cops. He could've closed health centers here and there.

Whatever he did, though, he would've had to have told us, and done so in the face of Independent Budget Office testimony--at the May 29 state Senate oversight hearing--that the arena was a money-loser for the city.

He would've had to confront his statement in May that no more city subsidies were available. And elected officials would've quoted Bruce Ratner, who told the Brooklyn Paper that "We don't need anything more."

article

Related coverage...

Atlantic Yards Report, AY is the great unmentionable in the argument for revising the public authorities reform bill

Richard Anderson of the New York Building Congress, who had no trouble last month testifying in favor of Atlantic Yards, penned an op-ed in the New York Post (DON'T CRIPPLE STATE AUTHORITIES) arguing for rejection of the pending public authorities reform bill.
...

As with the New York Times editorial earlier this week, Anderson supports the provision in the bill "to hold board members more accountable to their fiduciary responsibilities."

However, enforcing the fiduciary duty inevitably militates against selling land at below-market rates.

Posted by eric at August 21, 2009 11:32 AM