Develop-
don't destroy
BROOKLYN Press
Release Main Page
For Immediate Release: September 10, 2009
On Day After New Arena Designs Released…
NYC Independent Budget Office Study Shows Ratner’s Arena a Financial Loser
for NYC
Warns That Planned Bond Arrangement Won’t Work
BROOKLYN, NY— Fresh off a glitzy new design release by Forest City
Ratner, a new study concludes that the Barclays Center Arena will be a money
loser for New York City if built.
New York City’s Independent Budget Office released a fiscal analysis of
the Atlantic Yards arena, which shows that the arena would be a $40 million
loss for New York City with an additional loss of $180 million in opportunity
costs (foregone gains due to tax exemptions and below market land sales).
The fiscal analysis also calculates a $726 million taxpayer subsidy and
government benefits package for developer Forest City Ratner on the arena
alone.
The report, “The Proposed Arena at Atlantic Yards: An Analysis of City Fiscal
Gains and Losses,” is available
for download on the IBO website.
“Between the IBO’s study
showing the arena is a loss for the city, and the lack of any plans or guarantees
for affordable housing in the project, it is clear that the highly subsidized
Atlantic Yards proposal has a negative benefit for the public while providing
enormous financial benefits to Forest City Ratner, including $726 million
in subsidies and special benefits for the arena alone. That stark imbalance
is an important part of our eminent domain argument in the Court of Appeals,”
said Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein. “The project
is the result of a corrupt and illegal process and is a financial disaster
that destroys our community. We will not let it stand and will continue
to fight it by every means possible.”
The IBO study also warned that the foregone property taxes on the arena
site would not be sufficient to generate PILOTs (payments in lieu of taxes)
to pay off the $700 million arena bond Ratner is trying to float for the
arena. The IBO estimates that the PILOT payment, based on a reasonable land
assessment, would be about $15 million short—per year over 30 years—of the
necessary bond debt service.
“The question is will the arena land assessment be illegally inflated
by the City’s Finance Department to meet Ratner’s desired debt service or
will the bond amount be lowered, requiring a greater investment by the developer.
This complicated issue is precisely what Assemblyman Richard Brodsky investigated
with hearings and subpoenas on the new Yankee Stadium, and he should play
the same watchdog role with the Nets arena PILOT situation,” Goldstein concluded.
This issue is raised in a side bar on page 4 of the IBO study.
The IBO study is at:
http://www.ibo.nyc.ny.us/iboreports/AtlanticYards091009.pdf
DEVELOP DON'T DESTROY BROOKLYN leads a broad-based community
coalition
fighting for development that will unite our communities instead of dividing
and destroying them
DDDB is 501c3 non-profit corporation supported by over 4,000 individual
donors from the community.
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