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May 4, 2010

KPMG's lies about condo sales? ESDC calls "alleged inaccuracy" trivial and belied by current "robust demand," but ignores the deep discounts

Atlantic Yards Report

So what do the attorneys for the Empire State Development Corporation (ESDC) say when faced with legal papers calling attention to a blatant lie from consultant KPMG regarding condo sales in Brooklyn?

They question the conclusion, call it trivial, and say it's belied by other evidence.

It's quite a strained performance, given that current prices at the Oro development are less than half the prices Forest City Ratner expects for condos coming on line in five years.

Timetable issues

The statement comes in a motion (below) arguing that Supreme Court Justice Marcy Friedman should not reopen the case in which she dismissed a challenge to the ESDC's 2009 approval of the Modified General Project Plan, though she criticized the ESDC’s “deplorable lack of transparency."

One of the key issues is whether it was reasonable for the ESDC to assume a ten-year timetable for the project and thus evaluate environmental impacts based on that scenario, an issue seemingly belied by the Development Agreement that sets 25 years as an outside date.

The condo market

But another key issue concerns the current condo market in Brooklyn.

The KPMG market study concluded that the market could absorb the projected market-rate units by 2019. In her 3/10/10 decision, Friedman wrote, on p. 9:

KPMG concluded that FCRC's residential absorption rate estimates were supported by current market data for condominiums...

(Emphasis added)

Current market data?

But they weren't supported by current market data, because the market data was a lie.

As I wrote 3/30/10, while KPMG said that as of last August the Oro condo development had sold 75% of its units, a 3/29/10 press release indicated that the development had finally reached the halfway mark. And a New York Times article demolished KPMG's claims regarding sales of Richard Meier's One Prospect Park.

article

NoLandGrab: The ESDC — liars or morons? You decide!

Posted by eric at May 4, 2010 12:06 PM