Wednesday, September 07, 2005


IBO says Ratner underestimates costs at Atlantic Yards by at least $208.6 million

Well, the Independent Budget Office (IBO) didn't say it that directly, but that's the message, and one the press hasn't yet picked up. Forest City Ratner's consultant, sports economist Andrew Zimbalist, predicts the combined costs for sanitation and education services for the entire project over 30 years would be $321.4 million in present value terms. Zimbalist, incredibly, doesn't assume additional costs for public safety, writing: Based on conversations with former budget officials, FCRC concludes that the increment in fire and police budgets would be negligible. Note that Zimbalist doesn't even put that conclusion in his own words--does he believe it? His reports are linked from here.

The IBO report, Atlantic Yards: A Net Fiscal Benefit for the City?, estimates that the cost of delivering new education, sanitation, and police services over 30 years would be $530 million in present value terms, or $208.6 million more than Zimbalist does. The IBO notes that its higher predictions are based on an estimated 6,000 housing units, not the 5,850 number Zimbalist uses. However, Forest City Ratner might build 7,300 units under its "Alternative" plan. That suggests even higher costs. [Update: Indeed, this number was chosen.]

The IBO, surprisingly, leans toward Zimbalist in one area, saying that the additional costs for providing fire protection "would be relatively low," though the agency didn't use the term "negligible." However, the IBO disagrees with Zimbalist on costs for police service, saying, rather definitively, that "costs to the city for policing the new Nets arena could be significant." Well, yes.

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