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September 10, 2009
Net gain to Ratner, loss to public: IBO says developer saves $726M on arena; city loses $40M plus another $180M in opportunity costs
Atlantic Yards Report
Here's new that should be surprising to no one.
In the absence of any effort to update the flawed fiscal impact reports from the city and state on Atlantic Yards, the Independent Budget Office (IBO), at the request of several elected officials, has updated its September 2005 Fiscal Brief on Atlantic Yards, with far more pessimistic results.
Unlike the previous report, which found a modest net gain for the city over 30 years, the new report, titled The Proposed Arena at Atlantic Yards: An Analysis of City Fiscal Gains and Losses [PDF], estimates that net revenues would be negative for the city and modestly positive for the state and the Metropolitan Transportation Authority (MTA)--at least until significant lost opportunity costs were added.
Moreover, the losses for the city would be far greater--another $180.5 million--were opportunity costs to be calculated. Such opportunity costs--foregone gains thanks to tax exemptions and other below-market benefits--were not fully calculated in the 2005 report.
Indeed, the combination of subsidies and tax breaks, including $194 million in federal tax breaks on tax-exempt bonds, adds up to what the IBO calculates as $726 million in savings on the arena for developer Forest City Ratner. And that's without assuming--as does Assemblyman Richard Brodsky, in the case of the new Yankee Stadium--that the use of PILOTs (payments in lieu of taxes) to pay for a sports facility constitutes a full subsidy in itself.
NoLandGrab: Who woulda thunk it — Bruce Ratner wins, everybody else loses! And we want to build this arena why?
Posted by eric at September 10, 2009 12:05 PM