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October 13, 2009
Lawmakers sue MTA for Ratner's 'sweetheart' arena deal
NYPost.com
by Rich Calder
The MTA today was banged with a lawsuit over a recent “sweetheart deal” it gave developer Bruce Ratner to bail out his controversial Atlantic Yards project that includes building an arena in Brooklyn for the NBA’s Nets.
The suit, filed by several lawmakers, seeks to annul the Metropolitan Transportation Authority’s revised deal with Ratner in June that allows the mega-developer to pay off $100 million he owes the agency over 22 years for the 8.5-acre Vanderbilt rail yard site in Prospect Heights and also shave off more than $100 million of the $345 million in transit improvements he had promised there.
It alleges the cash-strapped agency violated the Public Authorities Accountability Act by failing to obtain an independent appraisal of the site or solicit competitive offers before agreeing to a new deal.
...The revised MTA plan allows Ratner to pay $20 million up front for the rail yard, and then spread out $80 million in payments over 22 years at a bargain interest rate of 6.5 percent.
Ratner in 2005 agreed to pay the agency $100 million up front, plus provide rail yard upgrades in exchange for various state approvals needed for the project. He cut that deal despite being outbid.
The new rail yard would be reduced from what was to be nine tracks with a capacity for 76 cars -- and worth $250 million -- to seven tracks that could handle 56.
...Ratner’s $100 million bid for the site in 2005 was $50 million lower than a rival proposal by Extell Development. An agency appraisal before that deal found the rail yard worth $214.5 million.
Ratner won after convincing the board the offer was worth $445 million with the transit upgrades.
Posted by eric at October 13, 2009 2:46 PM