Feds’ CityPoint bailout is a bad use of taxpayer dollars

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They made the unwise, risky investment. Now you’re holding the bag.

That, in a nutshell, is what happened this week when the city announced that it would funnel $20 million in federal stimulus money to the developers of the CityPoint tower in Downtown so that they can move forward with the shopping mall portion of the project.

A shopping mall — enabled with your tax dollars.

Supporters of the bailout, including Downtown Brooklyn Partnership President Joe Chan, say that the federal money will jumpstart a project that is necessary to “diversify” the economy in Downtown. But a new shopping center on the site of the failed Albee Square Mall is hardly the economic diversity that Downtown needs.

Make no mistake; The Brooklyn Paper has championed the use of federal stimulus money for projects that will be true economic engines or build critical infrastructure that will last for decades. But this shopping mall stimulus package does neither. It’s just a bailout to a team of private, for-profit developers who made a bad investment.

Recall for a moment the history of the Albee Square site. Developer Joe Sitt bought it for $25 million in 2001 and then flipped it for $125 million just six years later. No one held a gun to the purchasers’ head — they paid Sitt’s inflated, Wild West boomtown asking price. Then, when real-estate values started falling (what — they don’t always go up? Who knew?), the developers started looking for bailouts, first seeking a $400-million tax-free loan from the city last year, and now getting this $20-million infusion.

The city created its “Recover NYC” bond program to help private, for-profit developers operating in so-called distressed areas such as Averne, Harlem, or near Fordham Road in The Bronx. A full list of other proposals is on the Economic Development Corporation Web site, and includes rejected grant requests for a hospital expansion, the construction of a school, and the redevelopment and renovation of the substandard Port Authority Bus Terminal in Washington Heights.

Downtown Brooklyn is not the kind of “distressed” area that the Recover NYC program seeks to aid. In fact, the 2004 Downtown Brooklyn Plan upzoning created stunning wealth that has already encouraged massive, profitable skyscrapers and other ancillary development.

Taxpayers created that wealth by giving landowners billions in property value at the stroke of a zoning pen. And now we’re being asked to give more.

Updated 5:14 pm, July 9, 2018
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Reasonable discourse

Eric McClure from Park Slope says:
OK, explain to me why a $20 million bailout for CityPoint benefiting "a team of private, for-profit developers who made a bad investment" is bad, but many times that money in the form of a bailout for Bruce Ratner, a lone private, for-profit developer who made an even worse investment in a pro basketball team, is not?

I don't disagree with you about CityPoint -- it's a waste of money for a bad project which could instead be used to help spur small-business growth downtown.

But even you have to see that opposing stimulus funds for CityPoint while championing the same for Ratner's white elephant of an arena -- a money-losing arena that would be a net fiscal loser for city taxpayers, according to the city's Independent Budget Office -- is just plain dopey.

C'mon, Brooklyn Paper, we'll forgive you if you admit the utter misguidedness of your pro-arena ways.
Aug. 20, 2009, 9:48 pm
al pankin from downtown says:
I think this is a great use of the stimulus money, it is downtown brooklyn's version of the cash for clunkers money...I hope that Bruce Ratner also gets a big chunk of the cash, he deserves it. why waste the money anywhere else? keep it local. maybe they could get more money for some BBQ's in prospect park.
Aug. 21, 2009, 12:11 pm
LimestoneKid from Navy Yard says:
Damn straight it's a bad idea!
Aug. 31, 2009, 5:47 pm
sam from downtown says:
there is a public hearing on this misuse of stimulus funds on Sept. 10:

CRC/IDA Public Hearing

Thurs, September 10 * 10:00am

110 William St. 4th FL. Manhattan
Sept. 8, 2009, 11:23 pm
Jspec from Bed_Stuy says:
We all know it's better to give $$$ to the rich. It will trickle down. What a joke! If they are throwing away $$$ why not use it to restore some of those beautiful buildings, and improve the signage in the mall.
Sept. 27, 2010, 9:41 am

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