The Metropolitan Transportation Authority will move ahead with a massive public bailout of the struggling Atlantic Yards project, changing the project’s financing to save developer Bruce Ratner hundreds of millions of dollars.
The MTA’s finance committee met this morning to discuss a new deal for the developer, who had originally promised $100 million for rights to build over the Vanderbilt railyards in Prospect Heights, but would now 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, said MTA Chief Financial Officer Gary Dellaverson, who presented the package to the committee.
Ratner had originally gotten the railyard rights for less than its MTA-appraised value because he also promised $345 million in infrastructure improvements to the MTA facility.
Under the new deal, which is expected to be rubber-stamped by the full MTA board on Wednesday, Ratner would make just $147 million in railyard improvements.
“It’s not quite as good as we had hoped,” said Dellaverson, who added that the reduced renovations would result in diminished capacity.
Others used stronger language.
“This is a bait-and-switch,” said Theresa Urban of the anti-Yards Council of Brooklyn Neighborhoods. “The ‘glorious public benefits’ of Atlantic Yards are being whittled down.”
Representatives for Ratner did not respond in time for The Brooklyn Paper’s nonnegotiable online deadlines.
Dellaverson defended the deal, saying that the downturn in the economy encouraged the MTA to help Ratner, who must break ground by the end of 2009 on the arena, residential and office complex or risk new tax rules that would add prohibitive costs.
“Obviously, from every vantage point, it would be better to have $100 million at closing,” Dellaverson said. “[But] if they don’t [break ground by the end of the year], everything unravels.”
If he takes the full 22 years to pay off the $80 million loan from the MTA, he’ll end up paying $193 million (in future inflated dollars).
The finance committee 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.
On the eve of Monday’s committee meeting, a group of Brooklyn politicians demanded that the MTA refrain from altering the deal with Ratner.