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September 20, 2009
Really Wylde? New NY Federal Reserve Bank Director Supported Major NYC Net Loss ($220 Million) Megadevelopment
Noticing New York
This blog entry focuses on Kathy Wylde, who was recently appointed to the board of the Federal Reserve Bank of New York. Wylde has been a supporter of Michael Bloomberg, helping to overturn voter wishes on term limits, and also a supporter of the proposed Atlantic Yards project.
Here is a description of much of what is so wrong about Atlantic Yards:
A spectacularly flawed project in almost all respects, New York City’s Independent Budget Office has concluded that the Atlantic Yards arena, the only part of the Atlantic Yards project currently designed or for which any kind of enforceable, documented deal exists will be a net money loser for the city to the tune of $220 million($39.5 million in direct losses and $180.5 million in opportunity losses). The megadevelopment’s guaranteed inadequacies flow principally from the fact that it was set up and concocted by the developer, Forest City Ratner, as a subsidy-infusion system intended to deliver maximum benefit to the developer at the expense of the public. The IBO has conservatively calculated that on the arena alone the city will be giving the developer$726 million in no-bid giveaways.
The as yet undesigned rest of the megadevelopment has been formulated as a multi-decade no-obligation developer monopoly on a swath of valuable Brooklyn real estate that will allow the developer to blackmail the public into deeper subsidies, redoubling its net losses. In fact, just this week the developer caused New York Governor Paterson’s Empire State Development Corporation to casually shake the advance of another $25 million out of its sleeve. (See: Thursday, September 17, 2009, Noticing New York Comment on and at Today’s ESDC Board Meeting.) Since the project is unlikely ever to return the accelerated advance of that money, this extra $25 million could well bring the calculated net loss on the project up from $220 million to $245 million.
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The mega-project, containing the seeds for its own demise from the get-go, has been foundering embarrassingly for the five years since it was proposed. The developer could quite likely go under financially. There have thus been ample and repeated opportunities for responsible organizations to call for pulling the plug on the degenerating deal. We have written before about how Ms. Wylde has, instead, errantly recommitted her support to it no matter how far it degrades. (See: Monday, July 6, 2009, Wylde Ideas, Making For a Wrong Partnership.) Most recently, despite a change in the economic environment which should have made it possible to get a much better deal for the public, Ms. Wylde endorsed a far worse one on behalf of the Partnership (see the article just linked to) where hundreds of millions of extra giveaways are being lavished on the project without quid pro quo.
Wylde will join Lee C. Bollinger, President of Columbia University, and eminent domain abuser on the Federal Reserve Bank of New York board. The entry ends with this warning:
So, if you are wondering about what kind of biases might govern the Federal Reserve in conducting federal policy to protect the public and ensure soundness of the economy, just remember that two of its board members who are there to set policy and direction are Atlantic Yards, Bloomberg and eminent domain supporter Kathy Wylde and eminent domain abuser Lee Bollinger from Columbia.
And there is this. According to Crain’s:
The New York Fed also has the ear of Washington, D.C.—U.S. Treasury Secretary Timothy Geithner was president of the New York Fed until his White House appointment.
Worried?
Posted by steve at September 20, 2009 10:43 AM