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December 22, 2009
Public authorities: not reformed quite yet
New York Fiscal Watch
By Nicole Gelinas
Did the ESDC cut one corner too many and end up helping to issue fraudulent bonds?
Are New York’s public authorities fixed? Little more than a week ago, Gov. Paterson signed a bill to “rein in” New York’s “free-spending public authorities.”
But State Senator Bill Perkins of Harlem thinks that the convolutions New York’s Empire State Development Corporation (ESDC) put itself through to get the Atlantic Yards basketball arena funded “vitiate the longstanding efforts of the Legislature to reform public authorities and make them more accountable and transparent.”
Moreover, Atlantic Yards may not even pass muster under the law, Perkins says.
How could that happen?ESDC, the state agency in charge of Atlantic Yards, has worked with developer Bruce Ratner to complete the $511 million bond deal for the arena portion of the Brooklyn project through something called the “Brooklyn Arena Local Development Corp,” or BALDC.
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Whatever the complexities, the PACB and the comptroller should vote on the debt issuance, because the Atlantic Yards debt carries a moral guarantee from Albany. A vote “would have required the PACB to undertake a substantive review of the financial merits of the bond issue, which are questionable,” Perkins notes.
Posted by steve at December 22, 2009 7:03 AM