Wednesday, September 07, 2005


The IBO punts on the total costs for Atlantic Yards; the Times hardly notices

The 9/7/07 Times piece I already wrote about, Offer Is Doubled by Developer to Build Arena in Brooklyn, also discussed the Independent Budget Office's (IBO) report on the arena. The Times article said: Also yesterday, the New York City Independent Budget Office released a report stating that the arena would generate a modest but positive fiscal impact for the state and the city. After a significant public investment, which includes a $200 million subsidy, tax-exempt financing and numerous tax breaks, the arena would create an estimated fiscal surplus of $107 million over 30 years, or $28.5 million for the city alone, the budget office estimated.
Supporters and opponents of the project immediately seized on the report to buttress their arguments....
"As we have said all along," said James P. Stuckey, the company vice president overseeing the project, "Atlantic Yards is about more than basketball. It's about affordable housing and jobs and creating a development that complements the borough and the surrounding communities."

Ah, but the Times let Stuckey get away with talking about more than the arena, and the IBO report,
Atlantic Yards: A Net Fiscal Benefit for the City?, despite its title, isn't really about the proposed 22-acre development. It's just about the arena. As the IBO states: Given the minimal special benefits flowing to the rest of the project and the methodological limitations in estimating the fiscal impacts of mixed-use developments, IBO has not done an analysis of the housing and commerical portion of the plan.

Methodological limitations? That suggests, well, that the IBO thinks that Andrew Zimbalist's fiscal analyses, commissioned by Forest City Ratner and relied on by city and state boosters of the project, are purely speculative. So Stuckey's comments about housing and jobs are just verbiage--they're not supported by the report.

Also, the IBO takes Forest City Ratner's word that its $50 million cash bid is worth $329.4 million, because the developer will make other improvements, but the IBO says nothing about improvements promised by rival bidder Extell beyond its $150 million cash bid.

In the Times, the IBO's [Ronnie] Lowenstein said she acknowledged the limitations of doing a strict economic impact analysis for the arena alone. She said it was hard to estimate the increased number of jobs and spending for the entire project, although she believes the proposed housing would have a positive effect. Yes, but how much? See the above post, for some skepticism the Times left out.

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