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December 22, 2009
Pol says Brooklyn arena financing is illegal
New York Post
By Rich Calder
Here is further mention of State Senator Perkins' letter to Governor Paterson regarding concerns that bonds for the proposed Nets arena are illegal.
A state Senator says that a $511 million finance plan to help pay off an NBA arena proposed for Brooklyn appears to be illegal.
Sen. Bill Perkins (D- Harlem), chair of the Senate Committee on Corporations, Authorities and Commissions, sent a letter to Gov. Paterson Friday addressing legal concerns about the $511 million in tax-exempt bonds floated for developer Bruce Ratner’s project by the state-created Brooklyn Arena Local Development Corporation.
He said the funding plan raises “the spectre of fraud,” and that the bonds are “effectively worthless.”
At issue is the BALDC’s origin.
It was created by the Job Development Authority, a dormant state public authority, rather than directly through the Empire State Development Corporation.
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ESDC did not return a message seeking comment.
All concerned are still awaiting a definite statement from Governor Paterson on this matter.
When asked about the letter Saturday, Paterson said “If there is information in the letter that is asking us to take a look to see that everything was done properly, we would certainly be happy to do that.”
A spokeswoman for Paterson today sent the Post an e-mail saying “In addition, I can add that there is an objective, ongoing review being conducted by our counsel on the procedures. Top administration officials along with the chairmen of ESDC and the MTA met with Assemblyman [Hakeem] Jeffries last week to address concerns that he has with respect to Mr. Ratner’s commitment to building affordable housing. We are carefully reviewing.”
Related coverage...
Ok, so perhaps the counsel for Paterson, Peter Kiernan, will produce a statement sometime Tuesday, a day before the expected "master closing" in which all contracts are supposed to be signed.
As for Jeffries' concerns, the affordable housing depends on incentives and penalties built into the contractual documents that won't be made available, as well as the city's willingness to allocate scarce tax-exempt housing bonds to this project above others.
Posted by steve at December 22, 2009 7:54 AM