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July 13, 2010
The Job Development Authority, creator of BALDC (issuer of AY debt) & staffed by ESDC, fails to file annual report, budget info, mission statement
Atlantic Yards Report
Norman Oder has an interesting and eye-opening story on one of the most shadowy of New York's shadowy Public Authorities.
t sure looks like State Senator Bill Perkins' concerns about the Job Development Authority (JDA), the shadowy alter ego of the Empire State Development Corporation (ESDC) that was used to create the Brooklyn Arena Local Development Corporation (BALDC) to issue arena debt, deserved--and deserve--attention.
In one important official accounting, the JDA--which has no dedicated staff--appears to be a cipher.
Nearly alone among state authorities, it didn't submit a mission statement, an annual report, or a budget report, according to the first annual report by the state Authorities Budget Office (ABO).
The unusual transaction
Last December, Perkins in a letter to Attorney General Andrew Cuomo asked a question that, to my knowledge, has never been answered:
In essence, the ESDC crafted an unusual transaction whereby a nearly defunct entity, the Job Development Authority (JDA) was used to form the Brooklyn Atlantic Yards Development Corporation (BALDC) which then issued the $511 million worth of arena construction bonds.
I believe that the bond issuance was done in this manner to avoid a review by the Public Authorities Control Board (PACB) and the state Comptroller. I respectfully request that your office issue an opinion as to whether the process employed during the bond issuance was legal, as the public must have utmost confidence in the processes of government.
Such a review by the PACB might have delayed the arena bonds, possibly beyond the end-of-year deadline for a crucial tax exemption.
ESDC response
I asked the ESDC why no filing had been made by the JDA, whether it would be made, and whether the BALDC would be included.
I got the following response last week from spokeswoman Elizabeth Mitchell:
ESDC has been working towards a JDA filing, and has held discussions with ABO about filing for JDA. JDA is a legal entity distinct from ESDC without a separate staff (ESDC staff functions as JDA’s staff, although JDA has an independent board) and much of the information asked of public authorities is not applicable. Therefore we have been working to prepare a customized filing that takes into account JDA’s unique nature, and once the prior three years of filings are complete, we will immediately file this year’s report. We are currently preparing these filings and hope to submit them within the next few months. As the Brooklyn Arena Local Development Corporation is an affiliate of JDA, information regarding it will be covered in JDA’s filing.
There was no explanation for the delay.
Read on for lots more, including the news that more than a quarter of ESDC employees earn in excess of $100,000 a year. Is it any wonder that New York State is just about broke?
Posted by eric at July 13, 2010 12:04 PM