Does sloppy bookkeeping and oversight encourage confidence? Not in my mind. Yet the Empire State Development Corporation (ESDC) continues its shoddy oversight of Bruce Ratner's Atlantic Yard's project. Keep in mind that the ESDC has up to now been nothing but a rubber stamp for everything the Axis of crony capitalism (Ratner and his political pawns) has wanted. Now they file an inadequate and incomplete financial projection for Ratner's overdevelopment plan that basically tells the taxpayers very little about what it will actually cost them in the long run. This comes from the number one organization that has been fighting Ratner's corrupt plan from the start, DDDB:
Financial projections released today by the Empire State Development Corporation (ESDC) purporting to show Forest City Ratner's (FCRC) projected profit for the proposed "Atlantic Yards" project appear to raise more questions than they answer - and to severely understate the developer's profit.
The financial documents, which were released only after State Assemblyman Jim Brennan and State Senator Velmanette Montgomery sued the ESDC for the information, fail to provide sufficient details or underlying assumptions, including information on "sources and uses" typically provided for a project receiving significant amounts of public funding. In some cases, the documents omit information altogether, for example, assigning no projected value to the project's planned hotel. The true value of the assets, once built, would appear to be much higher than the values outlined; several elements of the plan appear to be estimated below market value, let alone future value.
At least one local real estate developer who has reviewed the documents had serious questions about the conclusions contained in the documents. Shahn Andersen, in comments posted to the web site Brownstoner.com, stated that he believed FCRC would earn approximately a billion dollars, and questioned how much money of its own the developer was actually putting up. He also questioned FCRC's purported rate of return as being severely understated.
The documents only project out eight years, to 2015, one year before the project's officially projected completion date. (In comparison, the MTA, in its Request for Proposals for the Vanderbilt rail yards, had required 20-year pro forma projections, although FCRC failed to provide the MTA with the requested information.) Some people with knowledge of the project, including "Atlantic Yards" landscape architect Laurie Olin, have said they expect construction to last 20 years.
The financial projections do reveal some interesting information about the arena, including the fact that the New Jersey Nets are currently losing some $40 million dollars a year. "It appears that the taxpayers are being asked to bail out a professional sports franchise that's currently a complete money loser," said Candace Carponter, spokesperson for Develop Don't Destroy Brooklyn. "While the city and state are bending over backwards to subsidize Bruce Ratner, it seems that it should be the other way around."
According to the documents, the act of relocating the Nets from New Jersey into an arena in Brooklyn will allow Ratner and the Nets' co-owners to essentially double their initial investment by 2013, providing the money-losing team's investors with a publicly subsidized golden parachute.
It's also unclear as to whether the ESDC has analyzed and verified the projections released today, or if they simply rubberstamped this submission, just as they have every other aspect of the "Atlantic Yards" project. Given the vast public subsidies that this project is slated to receive, the public has the right to expect some assurance from the government that the developer's numbers are comprehensive and based upon valid business assumptions," said DDDB's Carponter. "The footnote on these documents says 'For discussion purposes only - actual results may vary.'"
This kind of bullshit has real ramifications. Real costs to us, the taxpayers. Plus I was talking to someone tonight who was concerned that a particular development project that has been worked on for years may be soured by the bad name all local development is getting from the corruption and cronyism that surrounds Atlantic Yards.
This project stinks more and more. Back room deals. Eminent Domain Abuse. Inadequate infrastructure considerations. Increasing costs to taxpayers and decreasing community benefits. Dubious promises of jobs and affordable housing. And shoddy bookeeping. Why has this project been given the green light? Can't we require at least proper capitalism (not selling to the lowest bidder), proper bookkeeping and real, binding promises?
