Blog
Atlantic Yards One Step Closer To Compromised Development
November 25, 2009 by Neil · 6 Comments
Picture by Tracy Collins
New York’s highest court ruled 6 to 1 that the state could exercise eminent domain in claiming businesses, public property and private homes for economic development projects like Atlantic Yards, on the pretense that the property is blighted.
Bruce Ratner, Chairman of Forest City Ratner, Atlantic Yards’ would-be developer, called the court’s ruling a “light-switch” kind of decision for the long-stalled project. “I look at this as the last major hurdle; now we can proceed as we’ve wanted to for the last three years…The courts have made it clear that this project represents a significant public benefit for the people of Brooklyn and the entire city.”
Ratner’s optimism does not entirely reflect the realities on the ground: He and Goldman Sachs must complete a bond sale by December 31 to qualify for tax-free financing. tax-free bonds to be approved as part of a complex financing agreement meant to skirt federal laws intended to bar many stadiums and arenas from using tax-free debt.
Otherwise Forest City Ratner would have to resort to conventional financing, which could be prohibitively expensive. The developer is also hoping that the rating agencies will give his bonds an investment-grade rating and a lower interest rate. On Tuesday, a state-sponsored local development corporation authorized the sale of a combination of tax-exempt and taxable bonds. The tax-free are part of a complex financing agreement designed to dodge federal laws intended to prohibit stadiums and arenas from using tax-free debt.
Ratner scrapped famed architect Frank Gehry’s designs for a glass-walled arena and 16 towers. Atlantic Yards project was supposed to provide 2,250 units of affordable public housing — the crux of the basis for eminent domain. Records recently released under the Freedom of Information Act, however, reveal that Forest City need only seek funding through subsidies for affordable housing. If the developer cannot secure this money, he is under no obligation to build the proposed number of units. There is no guarantee that the project will include any affordable housing.
He also renegotiated his deal to buy the railroad land. Instead of paying $100 million at closing, he will make a $20 million down payment and pay the rest over time, while building a smaller permanent railyard than originally promised.
Thank you for the much-needed coverage of the very important event in this very controversial development proposal. We need all the exposure we can get.
Tracy,
Thanks for following my blog.
Who’s “we”?
Neil
“We” are the opposition to this development.
Tracy,
It’s a huge story. I’m all for multifamily development, but the number of instances of lack of fair play on the part of the state and the developer give me pause.
The property will not be developed as it was supposedly first envisioned.
The number of affordable housing units, the very justification for eminent domain, is questionable at best. Under the current rules, the developer need only apply for government assistance for affordable housing. Forest City Ratner is not obligated to build a single unit.
Furthermore, the number and scope of sweetheart deals between New York and the developer are staggering.
On top of that, the Court of Appeals made the wrong decision here.