Tough Months Ahead for Eminent Domain Abuser Bruce Ratner
Yesterday's New York Times featured a decent overview of the grim prospects still facing real estate developer and New Jersey Nets owner Bruce Ratner as he attempts to build his controversial Atlantic Yards project in Brooklyn. As the Times notes, if Ratner doesn't sell more than $500 million in arena bonds and break ground by December 31, 2009, he risks losing the project's tax-exempt status. In the meantime, he's also got an eminent domain lawsuit to worry about:
Critics, led by the group Develop Don't Destroy Brooklyn, contend that Atlantic Yards will overwhelm the neighborhood and unfairly benefit a developer who they say has received too many subsidies, including $305 million from the city and the state, along with tens of millions of dollars in tax breaks.
The Court of Appeals has set an Oct. 14 date for oral arguments: some local property owners are challenging a unanimous lower court decision approving the state's use of eminent domain. Daniel Goldstein, a spokesman for Develop Don't Destroy and one of the property owners, said "the project is dead" if their appeal is successful. A decision is expected in November.
There's no question that Atlantic Yards threatens to ruin a neighborhood (or two) while benefitting a private developer who has already received far too much corporate welfare from the city and the state—the centerpiece of the whole boondoggle is a new basketball arena for Ratner's Nets, after all. There's also the inconvenient fact that the allegedly cash-strapped Metropolitan Transit Authority (which just raised subway and bus fares) revised their 2006 sweetheart deal with Ratner into something even more generous. As I discussed in a recent article, in 2006 the MTA agreed to sell Ratner its 8-acre Vanderbilt rail yard—which had been appraised at over $200 million—for a lump-sum payment of just $100 million. Now the MTA says Ratner can pay just $20 million upfront, with the rest due over the next 22 years, a bailout deal that even the pro-Atlantic Yards New York Post has denounced. But Ratner can't proceed without those 8-acres, so the MTA dug deep into the public's pockets. And according to the Times, Ratner is still begging the government for handouts:
In recent weeks, the developer has sought additional housing subsidies from city officials, who have so far declined to go beyond the standard incentives for developers. The project's underwriters, led by Goldman Sachs, are also preparing to sell about $700 million in bonds for the arena in October.
Standard incentives, eh? Thank goodness for the city's newfound frugality.
Read the rest here. Reason's Atlantic Yards coverage is here.
