They made the unwise, risky investment. Now you’re holding the bag.
That, in a nutshell, is what happened this week when the city announced that it would funnel $20 million in federal stimulus money to the developers of the CityPoint tower in Downtown so that they can move forward with the shopping mall portion of the project.
A shopping mall — enabled with your tax dollars.
Supporters of the bailout, including Downtown Brooklyn Partnership President Joe Chan, say that the federal money will jumpstart a project that is necessary to “diversify” the economy in Downtown. But a new shopping center on the site of the failed Albee Square Mall is hardly the economic diversity that Downtown needs.
Make no mistake; The Brooklyn Paper has championed the use of federal stimulus money for projects that will be true economic engines or build critical infrastructure that will last for decades. But this shopping mall stimulus package does neither. It’s just a bailout to a team of private, for-profit developers who made a bad investment.
Recall for a moment the history of the Albee Square site. Developer Joe Sitt bought it for $25 million in 2001 and then flipped it for $125 million just six years later. No one held a gun to the purchasers’ head — they paid Sitt’s inflated, Wild West boomtown asking price. Then, when real-estate values started falling (what — they don’t always go up? Who knew?), the developers started looking for bailouts, first seeking a $400-million tax-free loan from the city last year, and now getting this $20-million infusion.
The city created its “Recover NYC” bond program to help private, for-profit developers operating in so-called distressed areas such as Averne, Harlem, or near Fordham Road in The Bronx. A full list of other proposals is on the Economic Development Corporation Web site, and includes rejected grant requests for a hospital expansion, the construction of a school, and the redevelopment and renovation of the substandard Port Authority Bus Terminal in Washington Heights.
Downtown Brooklyn is not the kind of “distressed” area that the Recover NYC program seeks to aid. In fact, the 2004 Downtown Brooklyn Plan upzoning created stunning wealth that has already encouraged massive, profitable skyscrapers and other ancillary development.
Taxpayers created that wealth by giving landowners billions in property value at the stroke of a zoning pen. And now we’re being asked to give more.