« Look at the graphics: Times devotes less space to EB-5 controversy than to puff pieces about Nets promotions | Main | Dear NY Media, Forest City Ratner Is Corrupt »

March 19, 2011

Press Release: Councilmember Lander Criticizes EDC for Refusal to Conduct New Cost-Benefit Analysis for Atlantic Yards, Calls for Suspension and Reduction of City Subsidies

Councilmember Brad Lander

New York, NY – On the heels of the revelation that Forest City Ratner may build the first residential tower at Atlantic Yards with modular construction, thus dramatically reducing total wages and tax revenues to the City, City Councilmember Brad Lander today criticized NYC Economic Development Corporation President Seth Pinsky's refusal to reevaluate the City's capital contribution to the Atlantic Yards project and conduct an updated cost-benefit analysis in light of significant changes to the project. Lander called for the City’s subsidy to Atlantic Yards to be suspended, and subjected to the same 17% capital cut that EDC is taking overall.

At the City Council's preliminary budget hearing on EDC's budget, Lander argued that changes to the project since EDC committed $200 million to Forest City – a much-longer timeframe, uncertainty about full build-out and the contemplated office space, and now the potential of modular construction significantly reducing wages and tax revenues – are likely to dramatically reduce the project’s tax revenues to the City, and therefore require a fully updated cost-benefit analysis, before the City proceeds to distribute any remaining subsidy dollars.

“The City’s subsidy to Atlantic Yards should be suspended until we have a new cost-benefit analysis, and subjected to the same 17% capital cut that EDC is taking overall,” Lander said. “I was not initially a die-hard opponent of this project, but I had many questions and concerns about whether the benefits would be realized, the public costs would be contained, the developer would live up to its obligations, and the process would be transparent. Unfortunately, those concerns have grown enormously, and it has become clear that City is very likely to lose many millions of dollars on this project, even as many of the contemplated benefits have evaporated. We need a new cost-benefit analysis before we proceed to put City taxpayer money into this project, just as we need real public oversight and accountability.”

Lander, together with Councilmember Letitia James, also asked Pinsky a series of questions about several troubling developments related to the project, including allegations that Senator Carl Kruger took bribes for his efforts to secure New York State subsidies for the Atlantic Yards project, and that representatives of Forest City Ratner and its partners may have misled foreign investors as part of its efforts under the EB-5 program to secure investment through the procurement of US visas, despite the fact that these investments will create no new jobs beyond what had already been promised.

Mayor Bloomberg has imposed a 10% capital cut for parks and infrastructure, and EDC overall has taken a 17% capital cut. Yet the City’s contribution to Atlantic Yards has not been reduced – despite the City’s fiscal difficulties, despite the many concerns surrounding the project, and despite the likelihood that the project’s tax revenues to the City are likely to be significantly reduced.

Posted by steve at March 19, 2011 11:49 PM