There is no better word than “bailout” to describe the efforts of the Metropolitan Transportation Authority this week in propping up developer Bruce Ratner’s arena, residential and office complex near the corner of Atlantic and Flatbush Avenues.
Under the provisions of a deal inked on Wednesday, Ratner now need only pay $20 million, rather than $100 million, to begin construction of his basketball arena and one to four towers around it.
And the MTA, which needed its own taxpayer bailout and is, in fact, raising fares next week, also reduced Ratner’s responsibility for infrastructure improvements at the railyard over which he hopes to build.
By most estimates, that move alone could save Ratner $100 million to $200 million.
Some Atlantic Yards supporters insist — in the words of Forest City Ratner Vice President Bruce Bender — that this new deal is “not a bailout.” On Thursday, Bender told The Brooklyn Paper: “The changes made this week were necessary to advance this project to closing this fall.”
We agree that government can — and often should — play a role in helping development. But the MTA’s responsibility is to the taxpayer, not the developer.
While we have long supported the idea of an arena at the site — and, indeed, took intense heat from our readers last week for reiterating that support — we have also lambasted the MTA for what we have always called “the Original Sin” of Atlantic Yards, namely selling Ratner the development rights over the railyard for a mere $100 million.
That price was substantially less than the MTA’s own appraised value. And it was $50 million less than Extell Development, another qualified bidder, offered.
At the time, the MTA said it accepted Ratner’s lower bid because he intended to make such a substantial renovation of the railyards.
Well, this week we saw where that promise went.
We do not blame Bruce Ratner for fighting for the best deal for himself and for an arena that we believe would be good for Brooklyn. But we are no longer alone in maintaining that the MTA, which made the original deal under Gov. Pataki, is misusing its resources as ineptly under Gov. Paterson.
This week, the New York Post editorial page, which has cheered the project at every turn, called for the MTA to hold up the terms of the original deal, saying that this week’s bailout “would be a bum deal even if the MTA was rolling in dough.
“If the climate is so bad today that a major developer … like Forest City can’t raise $100 million, what hope is there that it’ll be able to raise $4 billion-plus to cover the entire project’s costs?” the Post asked. “The MTA needs to watch its wallet. It can’t afford to subsidize private developers, and it shouldn’t try.”
We agree.
