In the wake of last week’s rumor that the New Jersey Nets could be headed to Newark instead of Brooklyn, plus Saturday’s neighborhood rally to demand that the state call a halt to the faltering Brooklyn project, Nets owner Bruce Ratner fired back with an op-ed in the Daily News insisting that he’s moving ahead with construction. Headlined “Atlantic Yards dead? Dream on,” Ratner’s essay insisted:
We’re still building all 6,400 units of housing – including 2,250 affordable units. We’re still building the iconic Miss Brooklyn tower and the state-of-the-art Barclays Center, the future home of the Nets.
Twenty-four hour later, though, Ratner revealed that the Miss Brooklyn tower had been dumped, in exchange for a smaller office-only building creatively titled “B1.” (The Brownstoner blog notes that the size reduction has actually been in the works for over a year, but this still represents a significantly new design, which the Gothamist blog dubs “Miss Jenga.”)
The real question remains whether to believe Ratner’s assurances that the $950 million arena will break ground later this year, or whether this is just a last-ditch effort to attract investors to a project that was designed for better economic times. If the latter, and Ratner falls short and the arena never gets built, I argue iin an op-ed in today’s Metro New York, that might end up being the best thing for Brooklyn.
There will be no repeat of the Miracle on 33rd Street: This afternoon, in a meeting that took all of five minutes, New York state’s Public Authorities Control Board voted to approve Bruce Ratner’s Atlantic Yards project, including a new Brooklyn basketball arena for the New Jersey Nets. Since the project is being overseen by a state agency that is exempt from city oversight, today’s vote was the final governmental approval necessary for the project to move forward.
There had been rumors as recently as yesterday that state assembly speaker Sheldon Silver would replay his role as stopper in last year’s New York Jets stadium controversy, blocking the Brooklyn deal at least until his fellow Democrat Eliot Spitzer becomes governor next month. But despite increasing pressure for him to delay the vote, Silver instead rubber-stamped the plan, reportedly in exchange for two concessions: trimming the size of the project’s “Miss Brooklyn” office tower so that it’s no longer the borough’s tallest building, and adding 200 units of affordable (or “affordable”) condos. “The changes are positive, but they’re small,” Brooklyn assemblymember Jim Brennan told the New York Times following the PACB vote.
The battle now turns to the courts, where opponents have filed one lawsuit against the taking of land by eminent domain, and promised to file another against the project’s environmental impact statement for being “fatally flawed.” The nuances of the Supreme Court’s Kelo decision just got much, much more important.
Three weeks after insisting it wouldn’t release details of its economic impact study of Bruce Ratner’s proposed Brooklyn Nets arena, the New York State-run Empire State Development Corporation this week released … well, a memo (PDF here). The seven-page letter from one ESDC staffer to another laid out an estimated $1.5 billion in projected public revenues from the project, but failed to estimate projected public costs – making it hard to assess the validity of the ESDC’s earlier claim that taxpayers would turn a net $1.4 billion profit.
After several rounds of subsequent e-mails with ESDC spokesperson Jessica Copen, I’ve finally gotten some answers:
While the ESDC memo projects $1.545 billion in new city and state revenues, the figure “should actually be $1.911 billion,” according to Copen. The $366 million difference consists of: $160 million in sales tax on construction materials, $147 million in income tax on Nets and visiting players, $42 million in sales tax on player spending, $15 million in sales tax on tickets and concessions, and $2 million in hotel taxes. (The memo says it includes these revenues, but according to Copen, they were actually left out of the accompanying charts.)
- The ESDC counts $492.9 million in public costs: $41.9 million in sales-tax exemptions for arena construction ($20m city, $20m state, $1.9m Metropolitan Transportation Authority), $199.2 million in mortgage-recording tax exemptions ($181.4m city, $17.8m state), and $251.8 million in “bond financing” ($113.5m city, $138.3m state), which presumably means the cash payments that have been agreed to. Subtract this from the $1.911 billion in projected benefits, and voila, you have $1.4 billion in taxpayer profit.
The problems, as I’ve noted on the Village Voice website, include that there’s no indication whether the numbers were adjusted for the substitution effect (money spent at Atlantic Yards might otherwise be spent elsewhere in the city) and leakage (money going to the Nets is less likely to recirculate in the local economy). The memo also states that all Nets players would be expected to live in New York state (and 30% of those in New York City), which is odd, considering that plenty of players on the city’s existing teams choose to live in the New Jersey suburbs.
Finally, there’s no way to tell how much of the “new” economic activity associated with the larger development would be cannibalized from elsewhere: Would the companies moving into the “Miss Brooklyn” office tower just be relocating from other parts of the city? Would the families moving into the new housing bring their own new jobs with them? The memo is silent on such matters, so it’s impossible to say. It’s just another indication of how economic impact documents are more art than science – or perhaps a careful blending of the two.