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September 10, 2009

IBO: Bruce Wins, NYC Loses

Runnin' Scared, IBO Report: Atlantic Yards to Cost City Big, Rain Cash on Ratner

This just hasn't been a good week for Bruce Ratner, the Nets owner who'd rather be the Nets' landlord. First, he unveils a new vision of his much-derided Atlantic Yards arena plan — now with more metal mesh! — and gets slammed by Times architecture critic Nicolai Ouroussoff for creating an "oddly clunky composition." Then this morning the Independent Budget Office issued its revised projections for the arena's fiscal impact on city coffers, concluding that any new tax revenues wouldn't be enough to pay for the city's costs.

The upshot, for those of you who are allergic to spreadsheets: The city is giving the arena $170 million in cash subsidies, plus another $180 million in tax breaks and other goodies. In return, it can expect to bring in about $130 million in new revenues over time — most of it thanks to the Nets themselves paying New York income taxes — resulting in either a $40 million loss or a $220 million loss for the city, depending on how you count. Ratner, meanwhile — who would be getting state and federal subsidies as well — is looking at a $726 million savings, or nearly as much as the whole arena is projected to cost in the first place....

NY Post, Study: Atlantic Yards will cost NYC $39M

Brooklyn’s controversial Atlantic Yards project – which was sold as a surefire way to fill the city’s cash coffers with new revenue – could turn out being a major money pit, a new study released today shows.

The city’s Independent Budget Office released a report saying delays and increased public subsidies for the project’s centerpiece, an NBA arena, would cost the city $39.5 million more in spending over its first 30 years than it would generate in tax revenues.
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But city officials called the IBO report “sloppy,” saying it only focuses on the arena portion of the $4.9 billion Atlantic Yards project, and fails to take into account the benefits of the 16 office and residential skyscrapers also planned in Prospect Heights.

IBO said it only concentrated on the arena because of the uncertainty over the rest of the project, but a city official pointed out that the city would get tens of millions of dollars in liquidated damages if Atlantic Yards is not fully built and the report doesn't address that.

NoLandGrab: For anyone who believes the city would ever actually collect from Ratner, we've got an arena to sell you.

The Brooklyn Paper, Report: Yards arena is a money pit

Opponents seized on the IBO study as evidence that one of the arena’s main selling points — that it would raise money for the city, not cost it millions — had vanished.

“It is clear that the highly subsidized Atlantic Yards proposal has a negative benefit for the public while providing enormous financial benefits to Forest City Ratner,” said Daniel Goldstein of Develop Don’t Destroy Brooklyn, who added that this “stark imbalance” will be a part of his group’s upcoming challenge to the project in the state’s highest court.

NY Observer, Nets Arena a Net Financial Loss for City, Report Finds

But measured in isolation as incentives for an arena, the finding serves to illustrate how the Nets arena, estimated to cost around $800 million, follows the model of most every other professional sporting venue in this country, built with the prop of subsidies that elected officials are often ever-so-willing to offer.
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But here the Nets were being stolen from New Jersey, bringing a whole new set of salaries, ticket sales, merchandizing and associated activity into the borders of New York City: The subsidy is meant to attract new money—not retain existing spending. Still, at least according to IBO’s analysis, the new tax revenue from that activity is not enough to cover the $169 million or so the city is adding in infrastructure investments and direct subsidy, a testament to just how substantial these incentives are for this project.

Field of Schemes, Nets arena subsidies worth almost as much as Nets arena

The New York City Independent Budget Office has issued an update of its 2005 study of the proposed Atlantic Yards arena to bring the New Jersey Nets to Brooklyn, and as Norman Oder notes, has come up with "far more pessimistic results."

NY1 News, Analysis Finds City Would Lose Money On Brooklyn Arena

An analysis released by the Independent Budget Office today found the arena of the Atlantic Yards project in Brooklyn will cost the city an estimated $164 million and create more than 3,000 temporary and nearly 1,000 permanent jobs for New Yorkers.

Posted by eric at September 10, 2009 1:23 PM