In the ongoing battle over Atlantic Yards, one central critique of good government advocates has been the abject failure of the legislature to do its due diligence and examine whether this project is indeed in the public interest, and therefore worthy of public dollars.
One of the myriad lollipops being thrown at Bruce Ratner is this: a 421-a tax reform bill just passed by the Assembly reformed the 421-a tax break given to developers; now, one must actually build affordable housing to receive tax breaks for it. From Develop Don't Destroy:
The Assembly passed a bill reforming the 36-year old 421-a property tax break. No longer will developers building new construction receive tax breaks when they build all market rate buildings. Now they must provide 20% of the units at "affordable" rates in each building, based on a cap set at 60% of Area Median Income (AMI). AMI for New York City is about $71,000 for a family of four (AMI for Brooklyn is about $35,000).
But Bruce Ratner gets a special deal written in clause 13 of the bill. For his Atlantic Yards project, he gets the tax break for his market rate condos. No other developer in the 421-a "Geographic Exception Areas" (which include Central Brooklyn where the project is proposed) will receive tax breaks if they build all market rate.
Mayor Bloomberg has called for a veto of the bill, and now, the two legislators who represent Atlantic Yards in the legislature, Velmanette Montgomery and Hakeem Jeffries, have made their displeasure known in no uncertain terms.
In a letter dated July 6, 2007, they write:
The City and State have presently committed in excess of $300 million in government subsidies to make the Atlantic Yards development possible, notwithstanding significant public discomfort and outright opposition to the project. In order to justify the substantial government subsidies, Forest City Ratner Companies ("FCRC") has consistently touted the "innovative Atlantic Yards housing program," as you have called it.
Pursuant to this housing program, FCRC will build 4,500 rental units, with 2,250 apartments set aside for low and moderate income families. FCRC also plans to build 1,930 condominium units as part of the Atlantic Yards development. On the eve of the Public Authorities Control Board vote in December 2006, FCRC committed to build 200 of these units on-site, as condominiums that are affordable to working and moderate income families. Please confirm in writing by Friday, July 13, 2007 if this is not your understanding.
The 421-a program, as recently pass by the Legislature, if signed by Governor Spitzer, requires 20% affordability at 60% AMI, in any apartment building that receives a tax exemption. However, because of an eleventh-hour, highly -secretive deal negotiated by the Real Estate Board of New York on behalf of FCRC, an Atlantic Yards carve-out provision will permit you to evade these requirements, unlike any other development in the entire City of New York. This preferential, lobbyist-negotiated treatment is completely unacceptable and undermines the integrity of the entire project.
It's unacceptable on good government grounds alone to give preferential treatment to any one party. It's even more galling when a developer receives massive tax breaks and subsidies and then doesn't even have to fulfill the same requirements expected of other developers. This is crony capitalism of the Halliburton variety. Governor Spitzer should veto the bill.
