A City Council effort to reign in a tax break enjoyed by Madison Square Garden should bring about a cutback of the massive public subsidies lavished on Atlantic Yards developer Bruce Ratner, two councilmembers demanded this week.
After the Council’s Finance Committee discussed MSG’s $11-million-per-year property tax abatement on Monday, Councilmembers Letitia James (D–Fort Greene) and David Yassky (D–Brooklyn Heights) demanded that the city and state revisit its subsidies for Ratner’s $4-billion mega-development.
“If you think the MSG deal was crummy, the Atlantic Yards deal is far worse,” Yassky, an early Ratner supporter, told The Brooklyn Paper.
Critics of MSG’s 25-year-old property-tax abatement say it has cost the city just under $300 million since 1982.
But Yassky pointed out that the city has already allocated $205 million to help build the proposed Atlantic Yards basketball arena, plus agreed to tax breaks that will bring the package to at least $500 million.
“So this is a much worse deal than MSG,” he said. “If we are going to scrutinize MSG, we have a responsibility to do the same for Atlantic Yards.”
Both councilmembers said they would put forward a resolution within days that would “scrutinize the effectiveness all the these tax breaks citywide,” James said.
She questioned, for example, why Ratner still gets tax breaks for his decades-old Metrotech complex and both his Atlantic Avenue shopping malls.
“He may have needed those subsidies in the past, but Brooklyn is hot right now, so these subsidies are inappropriate,” she added.
Yassky and James have called on Speaker Christine Quinn, who is spearheading the attack on the MSG subsidy yet is also a strong Atlantic Yards supporter, to bring the resolution to a vote.
It is unclear what would happen even if a City Council resolution passes. Any effort to trim or eliminate subsidies to MSG or Atlantic Yards would require approval in Albany.
The MSG deal was created in 1982, when the owners of the arena argued that if they didn’t get property tax relief, they would take the Knicks and Rangers out of New York City. At the time, it seemed like a plausible threat.
But now, money is flowing into Madison Square Garden, thanks to a privately funded renovation of the “World’s Most-Famous Arena” in the 1990s and a huge influx of revenue from cable TV, luxury boxes and higher ticket prices.
Meanwhile, opponents have turned their attention to the Atlantic Yards arena, which, unlike the Madison Square Garden renovation, will be built with public money.
The Independent Budget Office said that when its bean counters crunch the numbers, MSG’s tax break is greater than the $140 million in subsidies that Atlantic Yards will receive over 40 years — but that figure does not include the $305 million in direct city and state infrastructure improvements, a spokesman for the IBO said.
It also does not take into account that Ratner will not pay property tax at the Atlantic Yards arena for the entirety of his $1-per-year lease, not just for the 40 years that the IBO studied.
The growing hostility towards the subsidies was fanned last year when an investigation by Daily News columnist Juan Gonzalez revealed that Ratner is the single biggest recipient of property tax abatements. According to Gonzalez’s review of city records, Forest City Ratner paid the city $9.7 million in taxes in 2006 on half a dozen commercial buildings in Downtown Brooklyn — but if the tax abatement was not in place, Ratner’s bill would have been $26.3 million.
Following a longstanding company policy, a spokesman for Forest City Ratner declined to comment for this article.
For her part, Quinn’s spokesman, Andrew Doba said: “Speaker Quinn continues to believe that … it’s time for MSG to pay its fair share. As far as Atlantic Yards is concerned, once the councilmembers introduce a resolution, it will be referred to committee, where it will receive thorough and proper review.”