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A city panel approved a $20-million federal stimulus bailout for a stalled Downtown development on Tuesday, pushing ahead plans for a mall, residential units and office space where the Albee Square shopping center once stood.
Supporters have long touted the need for affordable housing and job creation that the ailing CityPoint tower on the Fulton Mall near Flatbush Avenue Extension project would provide, while opponents chided the for-profit developer for making a bad investment when it bought the land for $125 million from Coney Island developer Joe Sitt, who had purchased it for just $25 million six years earlier.
“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, echoing a recent Brooklyn Paper editorial.
“CityPoint developers chose to pay an astronomical price for the land,” 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. “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 spent elsewhere.
The struggling project once called for the tallest building in the borough with a mix of luxury units and affordable housing, but now needs the loan in order to get off the ground, according to Seth Pinsky, president of the city’s Economic Development Corporation.
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 in 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.
“A relatively small amount of foregone city tax revenue will … jumpstart larger development projects that will bring affordable housing, retail, and other amenities to neighborhoods that have long been underserved,” he said.
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.
©2009 Community Newspaper Group
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