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Call it the “Battle of the Bailout.”
Supporters and opponents of a plan to grant a stalled Downtown Brooklyn development $20 million in tax-exempt federal stimulus bonds clashed at a contentious public hearing on Thursday, just days before the city formally rubber-stamps the loan.
Touting the need for affordable housing and job creation, boosters of the ailing CityPoint project — which includes retail, office space, and mixed income housing in a new tower on the Fulton Mall near Flatbush Avenue Extension — urged the city to issue the bonds to the troubled development.
“We need to build CityPoint, and we need to build it right now,” Borough President Markowitz said through a staffer, who read the beep’s statement.
“The future of Downtown Brooklyn depends on it,” Markowitz’s statement, arguing that the project would spur development elsewhere in the neighborhood and provide much needed jobs and affordable housing.
The struggling project once called for the tallest building in the borough with a mix of luxury units and affordable housing, but now it needs a loan in order to get off the ground, according to Seth Pinsky, president of the city’s Economic Development Corporation and chair of its Capital Resource Corporation — the group that will decide on the stimulus request on Tuesday.
According to Pinsky, the tax-free bonds will cost the city about $308,000 in tax revenues over 30 years — a cost that is well worth the benefit of $340,000 of construction related tax revenues, $5.7 million in tax revenue from “ongoing operations,” as well as the creation of 100 construction jobs and nearly 70 permanent retail jobs in the portion of the project funded by the stimulus dollars.
“Put simply, by our calculations, a relatively small amount of foregone city tax revenue will result in the creation of … construction and permanents jobs, will generate millions of dollars in net, incremental tax revenue over the next three decades, and will jumpstart larger development projects that will bring affordable housing, retail, and other amenities to neighborhoods that have long been underserved,” he said.
But opponents said the developers don’t deserve the dollars because they put themselves at risk when they bought the land for $125 million from Coney Island developer Joe Sitt, who had purchased it for just $25 million six years earlier.
“Fundamentally, this project does nothing to benefit the Brooklyn community, and this is a straight-up Bloomberg bailout of developers who speculated and made poor financial decisions,” said John Tyus, a member of Families United for Racial and Economic Equality, in a statement that echoed the sentiment of a recent Brooklyn Paper editorial.
“In these challenging economic times, giving stimulus resources to this project would be a crime,” added Tyus, whose organization has battled against the CityPoint development since merchants of the Albee Square Mall were evicted from their businesses to make room for the project. “CityPoint developers chose to pay an astronomical price for the land, speculating on the profit they would make with their luxury development. Now they’re in trouble, but that’s not our responsibility. Their poor choices do not merit a bailout.”
Other bailout foes claim that the jobs created by the development wouldn’t be good ones, that neighborhood merchants might suffer from the arrival of national retailers, that the affordable housing won’t be affordable enough for low-income residents of the neighborhood, and that the money would be better lent elsewhere.
The current plan for CityPoint — which last year sought a $400 million tax free loan — would use the tax-exempt bonds for the construction of a four-story, 63-foot tall, retail development that could begin construction in March 2010.
The shopping component will tout “an exciting mix of first class local and national retailers” who “will be the first of their type for the Fulton Mall,” according to the developer’s loan application, though the document later notes that “tenants haven’t yet been determined.”
Also part of the first phase — but not benefiting from the tax-exempt loans which only fund shovel ready, financially feasible projects in “economically distressed areas” that can provide “a positive economic impact” — would be 260 new apartments, 120 of them affordable.
Starting in March 2011, a second five-year phase will construct three to four stories of retail and commercial space, as well as a residential tower boasting more than 170,000 square feet of mixed income housing.
Overall, the amount of office space square footage has been scaled down tenfold from earlier applications, and it remains unclear whether or not the builders will pursue their plans to construct the tallest building in the borough.
©2009 Community Newspaper Group
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