The cash-strapped Metropolitan Transportation Authority on Wednesday accepted
developer Bruce Ratner’s $100 million bid for the development rights
over 8.5 acres of train yards at the cusp of Downtown Brooklyn.
The Ratner bid was less than half the value of the real estate determined
by an MTA appraiser, and $50 million less than a rival developer’s
bid.
And Ratner — who seeks to build four soaring skyscrapers and 13 other
high-rises as well as an arena for the New Jersey Nets basketball team
on a platform over the property and on contiguous land — only has
to come up with a $10 million down-payment. The balance of would be payable
upon the project’s approval by state authorities.
An MTA appraisal that estimated the land to be worth $214.5 million was
cast aside as the cash-strapped agency accepted the 10 percent down, roughly
the cost of 10 subway cars or 20 city buses.
The bid by Ratner’s development company, Forest City Ratner, also
offers to renovate the Atlantic Avenue subway terminal, build temporary
and rebuild permanent rail yards due to the need to move the Vanderbilt
Yards at Atlantic Avenue for the project, and construct a pedestrian passageway
from the subway to the new arena.
The approval was voted 10-1 by the MTA Board of Directors, which is largely
appointed by Gov. George Pataki, a law school classmate of Bruce Ratner.
The vote followed hours of public testimony at the Sept. 14 hearing in
Manhattan, both for and against Ratner’s plan.
The only MTA board member to qutestion the deal at the hearing was Mitchell
Pally, a Suffolk county appointee.
Pally said he was baffled that the board didn’t insist on getting
more money, or arrange a deal whereby Ratner had to pay the full price
up front. His comment led to a heated exchange with MTA Chairman Peter
Kalikow.
“I’m not going to be subject to what an appraiser says. This
is the deal on the table,” Kalikow shot back.
Pally also questioned why the MTA was making its own transaction contingent
upon the actions of other state authorities.
“Why is the MTA making closing contingent on these other bodies?”
asked Pally. “We don’t know when this sale will close. It could
be two years, it could be five years, it could be 10 years,” he said,
pointing out that the MTA faces incredible demands in their current capital
budget.
Kalikow argued that Forest City Ratner would be spending its own money
on a public railway that would be made state-of-the-art.
To that, Pally noted, “The MTA, alone, would never have built any
modifications to the Atlantic Yards,” and said he’d looked at
the 20-year projected needs assessment for the agency, which mentioned
nothing about upgrading the Long Island Rail Road yards at Atlantic Avenue.
“[The rail yard] works fine the way it is. Forest City Ratner money
is not being used to substitute for projects the LIRR wants to do,”
Pally said. “We’re now going to spend money on projects we don’t
want to do, never wanted to do and don’t need? It makes no sense.”
After the vote, Borough President Marty Markowitz issued a written statement
in which he predicted that Atlantic Yards “will be something that
everyone, even those who may now oppose it, ultimately will see the great
benefit of.”
Opponents saw the MTA’s decision as a commitment to cronyism over
improved transit services, and criticized the board for accepting what
was decried as a “low-ball bid.”
“The MTA and Ratner have treated taxpayers with disdain and have
ignored the desires of the community,” said Daniel Goldstein, a spokesman
for Develop-Don’t Destroy Brooklyn, which opposes the Ratner project
and its dependence on the potential use of eminent domain seizures of
private property.
“We know Ratner stands to make a huge profit on this project, something
on the order of $1 billion, yet he is determined to rip off the straphangers
of by nickel-and-diming them,” he said.
At a July hearing, after Forest City Ratner made a $50 million bid that
was trumped by a $150 million bid by Extell Development Company. Ratner
doubled his price during exclusive negotiations with the MTA that did
not allow participation by Extell.
In a statement Wednesday, Extell spokesman Bob Liff said, “Extell
is disappointed that the MTA took the lower bid for the Vanderbilt Yards.
Our bid still stands, and we hope the community is given an opportunity
to fully participate in the process.”
Forest City Ratner officials did not return repeated calls for comment.
Bertha Lewis, executive director of the Alliance of Community Organizations
for Reform Now (ACORN), which is involved in the affordable housing component
in the Ratner plan, celebrated the MTA decision. “It’s a win,”
she said. “I love it.”
“[Pally] certainly put some thought into it and I think it’s
great he did,” Lewis said. “But in the end, I’m very happy
the board made the decision it did.”
A study released by the city’s Independent Budget Office last week
determined the development plan for the arena to bring $1 million a year
in revenues over 30 years.
