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Two city councilmembers are not giving up on their bid to withhold hundreds of millions of dollars in city and state subsidies from the Atlantic Yards mega-development, despite an initial rejection by the council.

Councilmembers David Yassky (D–Brooklyn Heights) and Letitia James (D–Fort Greene) asked the council’s Finance Committee to take up the matter of those Atlantic Yards subsidies while considering a resolution calling for the state to end property-tax exemptions for Madison Square Garden.

“If we are going to say this about Madison Square Garden, we should say it about Atlantic Yards, too,” said Yassky, who said the measure would be re-introduced, this time as a freestanding resolution, not an amendment.

According to the councilmembers’ calculations, the proposed arena for the Nets will get close to $700 million in subsidies from the city and state.

The resolution’s failure came days after Ratner’s lawyers revealed that ongoing legal challenges to the project are likely to create “significant difficulties and cost increases in concluding the bond financing that is essential to the arena’s completion.”

That revelation came in court papers asking a state appeals panel to expedite opponents’ appeal of a recent court decision that found that the Empire State Development Corporation’s environmental review of the mega-project was legally sufficient.

“The credit markets are in turmoil at this time,” Andrew Silberfein, the executive vice president and director of finance for Forest City Ratner Companies, said in the affidavit, referring to the fluctuating costs of borrowing money. “[There] is a serious question as to whether [the state] will be able to proceed with the financing for the arena while the appeal is pending before this court.

Sal Galatioto, a sports industry banker, told the New York Times that “banks aren’t completely out of the market and the bond market is still there. But the risk is continued delay.”

Opponents scoffed at the developer’s implicit suggestion that legal challenges to the controversial project were to blame for his financial woes.

“We’re in court to defend the community’s rights,” said Daniel Goldstein of Develop Don’t Destroy Brooklyn, one of the plaintiffs in the suit.

In addition to the environmental review case, another pending lawsuit challenges the state’s use of eminent domain.

©2008 The Brooklyn Paper

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