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May 21, 2011
The Miscalculations Encouraged By the Fuzzy Math of Subsidies: Yankee Stadium Bonds on Verge of Default- A Case Study
Noticing New York
This article reviews the imminent financial disaster of publicly-subsidized Yankee parking garages and includes a cautionary note regarding Atlantic Yards.
The default is illustrative of a danger everyone should be on guard against when it comes to development through subsidies: Beware of miscalculation because those involved in development are likely to have put away their sharp pencils. Subsidies, generate fuzzy math, fuzzy thinking and they take peoples' eyes off reality and real costs. Those who are expert at working City Hall to finagle subsidies do not necessarily have the same skill sets as those who know how to shave a profit out of the real world, and frequently there is also the danger that their thinking is that if and when they are off on their numbers they will be patching things together at the back end with additional subsidy flows, perhaps with a “too big to fail” argument. That seems to be the case with Atlantic Yards. (The latest about Atlantic Yards fuzzy math was reported upon by Atlantic Yards Report yesterday.)
In the case of Atlantic Yards, say for example with the mega-project’s implausible initial job-projection numbers, fuzzy math is cultivated as a habit to get a foot in the door for what would otherwise have been an unacceptable project. Atlantic Yards' false projection of a ten-year build-out rather than a multi-decade build-out is another example.
Posted by steve at May 21, 2011 11:36 PM