As expected, the Metropolitan Transportation Authority approved a massive public bailout of the struggling Atlantic Yards project today, changing the project’s financing to save developer Bruce Ratner hundreds of millions of dollars.
The full MTA board, following a presentation on Monday, met this morning and overwhelmingly rubber-stamped a deal to allow Ratner, who had originally promised $100 million for rights to build over the Vanderbilt railyards in Prospect Heights, to pay just $20 million up front for the prime eight-acres.
The remaining $80 million would be paid out, at 6-1/2 percent interest, over the next 22 years.
Ratner secured the railyard development rights in 2006 for less than its MTA-appraised value because he also promised $345 million in infrastructure improvements to the MTA facility.
Under the new deal, though, Ratner would make just $147 million in railyard improvements.
The MTA board vote was 10-2, and it came moments after the main Atlantic Yards opposition group, Develop Don’t Destroy Brooklyn, tried to upstage the meeting by offering $120 million for the development rights over the Vanderbilt Yard.
The group’s spokesman, Daniel Goldstein, made the offer during the public comment period. The offer was not accepted. In fact, it was not discussed at all by the board members.
On Monday, MTA Chief Financial Officer Gary Dellaverson admitted that the deal was “not quite as good as we had hoped,” but necessary to jumpstart the stalled project. Dellaverson did not comment at today’s vote.
“Obviously, from every vantage point, it would be better to have $100 million at closing,” Dellaverson said earlier this week. “[But] if they don’t [break ground by the end of the year], everything unravels.”
The full board also approved a naming-rights deal with Ratner, who will pay $200,000 per year over the next 20 years to have the Atlantic Avenue and Pacific Street subway stations co-named “Barclays Center.”
It’s the first licensing deal for a subway station. Neither the Yankees nor the Mets pay to have stations near their new stadiums include the team names.
Many of Ratner’s biggest allies have abandoned the developer in light of the recent changes to the project, which include firing architect Frank Gehry earlier this month, and inking a new deal with the state on Tuesday that lets him take longer to build — or not build — the entire project.
On Wednesday, the New York Post, which has long supported the project, called on the MTA to reject the bailout and hold Ratner to his original promises.
“We backed the Atlantic Yards development, including a new basketball arena for the Nets and 16 new buildings, from the start,” the Post editorial stated. “We still think investment there will benefit Brooklyn. But the MTA needs to watch its wallet. It can’t afford to subsidize private developers, and it shouldn’t try.”