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December 20, 2009
Officially Worthless - Atlantic Yards JunkYard Bonds - Shady Backroom Plan Backfires
Freddy's Brooklyn Roundhouse
$511 million in worthless bonds for Atlantic Yards were sold in the last week. Only problem: To get around government regulations, the crafty Ratner had his bonds sold through the Labor Authority, instead of by an ESDC subsidiary, and the Labor Authority isn't authorized for tax exempt status for real estate bonds! Senator Bill Perkins issued a letter last week officially calling the shady bonds "effectively worthless," since they were sold as tax-free bonds, and they are clearly not tax free.
Save-the-neighborhood advocates called it early when they brought a garbage truck to the bond-rating agency (which missed a big issue with the bonds) and tossed mock bonds into it, calling the bonds, JunkYard Bonds, to associate them with junk bonds. Only these bonds are worth even less than junk bonds without true tax-exempt status.
During a week when the Governor claimed New York State was about to be insolvent, and one week after he signed a law to reign in public authority spending, the State issued bonds in a backdoor way to help its special friend, billionaire Bruce Ratner. And now this has backfired. But there is more in Ratner's stocking. The MTA is cutting 2 train lines, and free student metrocards to honor it's less than half-price deal with Ratner in its no-bid sale of the Vanderbilt Railyards.
Posted by steve at December 20, 2009 6:54 AM