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July 27, 2011

FAQ: Forest City Ratner's ridiculous claims about Atlantic Yards tax revenues and jobs, and what's wrong with the (somewhat more sober) city and state projections

Atlantic Yard Report

Atlantic Yards will be an economic engine for Brooklyn, New York City and the State generating more than $5 billion in new tax revenues over the next 30 years. In addition to tax benefits, the project will also create thousands of new jobs: upwards of 17,000 union construction jobs and up to 8,000 permanent jobs.
--Developer Forest City Ratner, July 2011, as claimed to Crain's New York Business

Will the project bring in $5 billion in new tax revenues?

Not at all. That's a variant of the notorious $6 billion lie touted by sports economist Andrew Zimbalist, Forest City Ratner's hired consultant, working well outside his expertise. Bizarrely, FCR executives and an FCR lawyer at times claimed in legal papers that it was a state estimate. That was an extra lie.

What's wrong with the $5 billion calculation?

There are many reasons why the reasoning's flawed, such as the use of new residents' income to calculate benefits, which is like Donald Trump claiming he's creating an "economic engine" by building speculative condos.

But the calculation also violates two standard practices among economists analyzing these kind of developments.

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Posted by eric at July 27, 2011 11:22 AM