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November 29, 2009
Affirming Atlantic Yards
Crain's
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The editors at Crain's are looking at the proposed Atlantic Yards project in a rear-view mirror while wearing rose-colored glasses.
New York's highest court did more than affirm the right of the state to use eminent domain in last week's crucial ruling on the Atlantic Yards project. The Court of Appeals endorsed both the public good the project offers and the right of elected officials to implement development plans over the objections of a few holdouts. If bond investors are willing and New York politicians steadfast, Forest City Ratner will break ground in the coming months.
Nope, if the court affirmed anything, it's that the standard for "blight" set by the State of New York is pitifully low.
The basic rationale for building Atlantic Yards has been forgotten amid financing problems, legal challenges and orchestrated opposition. It is nothing less than a bet that New York has a bright future—that the surging growth of the city's population will require new residential neighborhoods near transit hubs. The sports arena is designed to kick off a project that will bring thousands of new residential units to an underdeveloped area and give Brooklyn's prestige a worldwide boost.
We at NLG have never forgotten the rationale for Atlantic Yards. It is a land grab for the benefit of Bruce Ratner.
Nobody knows when, if ever, the housing component of the project will be built. The market in Brooklyn is over-saturated with luxury housing of the type being proposed for the project. An agreement between the ESDC, the tool of developer Bruce Ratner, gives him decades to build the project.
Also not well-understood is that opposition to the project has been grossly overblown. A 2006 Crain's poll found that two-thirds of New Yorkers—and two-thirds of Brooklyn residents—supported the project. There is no reason to believe that much has changed. The mayor and governor—whether Spitzer or Paterson—have never wavered. A few Brooklyn politicians have defected, but others remain behind the project. Develop Don't Destroy Brooklyn and its earnest but small band of allies essentially demand that they dictate the terms of development in the area, not elected officials.
The 2006 poll indicated that a majority of respondents felt they didn't know much about the project. In the intervening years, it is likely that more people are aware of the project and, less likely to support it and the massive public subsidies needed to build it.
DDDB boasts 4,700 donors to its legal fund, which qualifies as bigger than a "small band." Also, no local elected officials have ever voted for this project. And DDDB has never demanded that they dictate development rights; only that local, elected representatives be allowed to represent their constituencies on this matter.
One major hurdle remains for Forest City. The company must sell tax-exempt bonds by the end of the year in a difficult market or lose access to that source of inexpensive financing. Investors must be willing to buy the bonds despite at least three new lawsuits filed in recent weeks against Atlantic Yards that theoretically could end the project and cause them to lose their money.
The idea of mounting a successful legal challenge is far-fetched. All the court decisions so far—and there have been 24—have turned back the lawsuits against Mr. Ratner. The strategy of Don't Destroy Brooklyn and its allies isn't even about the law anymore; it is about trying to scare the investors away.
Oh lord, there's that 24-court-cases number. Can anybody explain what that number really means. There certainly haven't been 24 cases.
Besides the pending legal challenges, investors might be concerned that there's something fishy about bonds being floated to finance an arena defined in 2006 but since reconfigured by 2009.
That's where political leaders should come in. It is up to the mayor, the governor, the borough president and other elected officials in Brooklyn to reconfirm their support and their commitment to making this project happen in order to reassure those investors.
Fortunately, some politicians have chosen to be responsible regarding this project. Primarily, City Councilmember Tish James and State Senator Velmanette Montgomery are fighting to keep increasingly precious tax dollars from funding a frivolous arena.
Posted by steve at November 29, 2009 11:04 AM