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December 21, 2009
How Atlantic Yards impacts the MTA’s bottom line
2nd Ave. Sagas
by Benjamin Kabak
Late last week, amidst all of the talk about the MTA’s budget crisis, State Sen. Pedro Espada nearly made a good point. In a letter to MTA CEO and Chairman Jay Walder, Espada urged the authority head to examine the state of the MTA’s real estate holdings. His point though was a bad one.
“MTA budget gap needs must be measured against real numbers, and the MTA must prioritize fiscally prudent lease and sale of assets before deciding to leave children, seniors and hard-working citizens stranded without a safe, reliable and affordable means to get to and from work, school, grocery shopping and doctor’s appointments,” Espada wrote. “I would like to hear from you as soon as possible regarding the MTA’s real property holdings as a solution to the Authority’s serious budget concerns.”
Now, it doesn’t take an economic genius to understand the folly of Espada’s remarks. First, he is urging the MTA to sell its real estate holdings during one of the greatest periods of market depression in U.S. history. Second, MTA real estate sales are simply another one-off quick fix and provide no long-term secure solution to the agency’s financial problems. To sell now, in other words, would be folly.
Unfortunately, for transit advocates, Espada missed an opportunity to make a point. He could have used the MTA’s summertime decision to accept just $20 million up front from Bruce Ratner for the Vanderbilt Yards land rights to question whether the MTA is fiscally smart enough to take advantage of its real estate holdings. Originally, in 2005, the MTA extracted a promise for $100 million from Ratner, and even then, the price was a below-market rate. Today, the deal looks even worse.
...At a time when the agency must maximize its revenue potential, the authority — and the state along with it — is simply handing over free money to Bruce Ratner while the rest of us face the specter of service cuts. A full market rate payment for the Vanderbilt Yards land wouldn’t close the 2010 gap by itself, and since the MTA can sell that land only once, it wouldn’t help the future. But a better deal would benefit both the authority and its riders.
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Related coverage...
Brooklyn Daily Eagle, Brooklyn Broadside: MTA Cutbacks: Why a Sudden Budget Shortfall?
Dennis Holt, on the other hand, sees no connection between Atlantic Yards and the MTA's budget woes.
The hullabaloo and horror stories now begin as the Metropolitan Transit Authority fires the shot heard ’round the town. One hundred and seventy fingers are pointing in every conceivable direction in an attempt to find fault.
Daniel Goldstein of Develop Don’t Destroy Brooklyn even blames Bruce Ratner for the whole mess. Most other statements are more rational.
...So, here we go again: Profound public policy should be combined with practical common sense; but one can bet that no one will make that ideal merger permanent.
NoLandGrab: "Common sense" might dictate that the blatant giveaway of MTA-owned land for a fraction of its value might relate in some way to the agency's ever-widening budget gap, but Holt won't take his own advice.
The Brooklyn Paper, Rejection! Court turns down Yards foes in suit over MTA’s sweetheart deal
A state court has once again rebuffed an effort to throw a wrench in Bruce Ratner’s Atlantic Yards machine, rejecting a lawsuit that accused the MTA of improperly selling its Vanderbilt rail yard by not seeking new bids after reopening the original 2005 deal with the developer this summer.
The suit, filed by panoply of elected officials and opposition groups, claimed that the Metropolitan Transportation Authority broke a state law that was passed in the wake of Atlantic Yards to curb abuses by state authorities through stricter transparency and ethics guidelines.
Posted by eric at December 21, 2009 10:39 AM