The Times continued their consistent whitewash of Forest City Ratner’s attempt to gain control of development rights of Vanderbilt Yards in Brooklyn. Like the tortured saga on the West Side (Hudson Yards), once again it’s hard to parse out the relative merits and costs of two competing bids — one a megalithic mixed use complex with a sports arena as the showpiece, and the other a last-minute submission that promises more cash up front and seems to cater more directly to the interests of the local residents ardently opposing the other bid, which seemed to arise from closed door meetings that we supposedly left behind. Kind has a funny ring, doesn’t it? Not to mention a slipshod approach to bid management from the avatar of good money management, the MTA, and an appraisal that leaks out almost the same day as the pending vote that reveals that both bids, in strict dollars, are substantially less than the internal valuation as determined by the MTA.
Whitewash? How? I’m quoting a bit out of context, but with roughly equal (being very charitable to the Times) reporting skill and access (even though the MTA ‘released’ details of the two bids, there is nothing on the MTA site, aside from the RFP document), see if you can spot reportorial slant in either of the two following snippets (from the Observer and Times, respectively):
A study by the Pratt Institute Center for Community and Environmental Development estimates that the true cost of Forest City’s plan—including tax credits that the city and state offered under an exclusive agreement signed in March—might exceed $1 billion.
But Extell’s bid requires a subsidy of up to $150 million from the city and the state for infrastructure. The closing will not take place until after the company obtains the needed public approvals, a process that could take a year or longer.
That’s the Times trying real hard to not calculate apples to apples. See, the Ratner deal seeks several subsidies, including at least $100 million from the city and state, and they have a pre-existing agreement for double that, in addition to a sales tax exemption on materials, but the Times is trying to spin the Extell bid as somehow a government handout. This is likely because Ratner is their good buddy (who helped finagle a rather cushy PILOT deal from the city), and as a result, like to focus on immediate costs — which in this case, is not entirely clear that the Ratner bid even wins on — rather than total public cost/benefit. Not accounted anywhere is potential litigation costs (likely borne by Ratner, but which may pull in the city if the eminent domain disputes drag on, or if any leverage is found regarding the EIS), and the Times conveniently leaves off any projections about when Ratner is ready to start — if there are similar delays to his bid would make the sniping of ‘year long delay’ perhaps irrelevant.
Topping it off is the pesky detail that the city recently passed a law that would force the MTA (those folks who were out writing exclusive deals as noted above, well before someone asked if perhaps competitive bidding in the hottest real estate market in a generation might not produce more value for the city) to accept the highest bid. As the law is not effective until the end of the year, the MTA is in an uncomfortable position of pretty much flaunting their disregard of City Council — to say nothing of common sense — over a technical detail.
Since this pending law won’t change how the voting happens — next week, by some accounts — the failure to present a reasonably equivalent accounting of the offers is only slipshod journalism, but outright deception. The Real Estate makes the best go of it, noting that the press release Ratner releases touts a total value of $329 million, which includes the cost of the yard platform, the development cash, and long-term sales tax benefits. It’s not clear if the up to $200 million in state and city subsidies are netted against this number (meaning it could be as little as $129 million in total value, and a goodly portion of that would be sales tax that users, not Ratner, would contribute). Ratner’s organization is claiming they will only be taking half of what was previously promised, whereas Extell is taking $150 million from their bid. The sales tax exemption on materials is not included, but with 7.5 million square feet being constructed, allowing $80/sf for materials (I’m just making that number up), that’s an additional $50 million in direct subsidy.
The Extell bid presents more immediate cash, but the yard costs are not clearly delineated in the write-ups I’ve found, meaning that the $150 million could cover it, or they would be kicking in for those costs. If the former is the case, it’s basically a zero dollar investment on the part of Extell. Depending on how Forest City is massaging the numbers, their net offer may be less than zero. None of this gets the MTA the $214 million the yards, the number recommended by the appraiser’s report. It might be easier to simply stick a price tag on Atlantic Avenue and see if anyone steps up (for all their bluster, the Jets certainly didn’t, missing a deadline last week to submit a $50 million deposit required to keep their bid valid). In the meantime, don’t count on the Times to provide a clear assessment of costs to the city.
UPDATE: The Real Estate does the numbers in very helpful point-by-point format. In the end, it is still hard to come to a one-to-one conclusion, but we’re getting closer to at least seeing what the comparative value is.
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A hundred million here, a hundred million there. Pretty soon we’re talking about real money.
The Times continued their consistent whitewash of Forest City Ratner’s attempt to gain control of development rights of Vanderbilt Yards in Brooklyn. Like the tortured saga on the West Side (Hudson Yards), once again it’s hard to parse out the relative merits and costs of two competing bids — one a megalithic mixed use complex with a sports arena as the showpiece, and the other a last-minute submission that promises more cash up front and seems to cater more directly to the interests of the local residents ardently opposing the other bid, which seemed to arise from closed door meetings that we supposedly left behind. Kind has a funny ring, doesn’t it? Not to mention a slipshod approach to bid management from the avatar of good money management, the MTA, and an appraisal that leaks out almost the same day as the pending vote that reveals that both bids, in strict dollars, are substantially less than the internal valuation as determined by the MTA.
Whitewash? How? I’m quoting a bit out of context, but with roughly equal (being very charitable to the Times) reporting skill and access (even though the MTA ‘released’ details of the two bids, there is nothing on the MTA site, aside from the RFP document), see if you can spot reportorial slant in either of the two following snippets (from the Observer and Times, respectively): That’s the Times trying real hard to not calculate apples to apples. See, the Ratner deal seeks several subsidies, including at least $100 million from the city and state, and they have a pre-existing agreement for double that, in addition to a sales tax exemption on materials, but the Times is trying to spin the Extell bid as somehow a government handout. This is likely because Ratner is their good buddy (who helped finagle a rather cushy PILOT deal from the city), and as a result, like to focus on immediate costs — which in this case, is not entirely clear that the Ratner bid even wins on — rather than total public cost/benefit. Not accounted anywhere is potential litigation costs (likely borne by Ratner, but which may pull in the city if the eminent domain disputes drag on, or if any leverage is found regarding the EIS), and the Times conveniently leaves off any projections about when Ratner is ready to start — if there are similar delays to his bid would make the sniping of ‘year long delay’ perhaps irrelevant. Topping it off is the pesky detail that the city recently passed a law that would force the MTA (those folks who were out writing exclusive deals as noted above, well before someone asked if perhaps competitive bidding in the hottest real estate market in a generation might not produce more value for the city) to accept the highest bid. As the law is not effective until the end of the year, the MTA is in an uncomfortable position of pretty much flaunting their disregard of City Council — to say nothing of common sense — over a technical detail. Since this pending law won’t change how the voting happens — next week, by some accounts — the failure to present a reasonably equivalent accounting of the offers is only slipshod journalism, but outright deception. The Real Estate makes the best go of it, noting that the press release Ratner releases touts a total value of $329 million, which includes the cost of the yard platform, the development cash, and long-term sales tax benefits. It’s not clear if the up to $200 million in state and city subsidies are netted against this number (meaning it could be as little as $129 million in total value, and a goodly portion of that would be sales tax that users, not Ratner, would contribute). Ratner’s organization is claiming they will only be taking half of what was previously promised, whereas Extell is taking $150 million from their bid. The sales tax exemption on materials is not included, but with 7.5 million square feet being constructed, allowing $80/sf for materials (I’m just making that number up), that’s an additional $50 million in direct subsidy. The Extell bid presents more immediate cash, but the yard costs are not clearly delineated in the write-ups I’ve found, meaning that the $150 million could cover it, or they would be kicking in for those costs. If the former is the case, it’s basically a zero dollar investment on the part of Extell. Depending on how Forest City is massaging the numbers, their net offer may be less than zero. None of this gets the MTA the $214 million the yards, the number recommended by the appraiser’s report. It might be easier to simply stick a price tag on Atlantic Avenue and see if anyone steps up (for all their bluster, the Jets certainly didn’t, missing a deadline last week to submit a $50 million deposit required to keep their bid valid). In the meantime, don’t count on the Times to provide a clear assessment of costs to the city. UPDATE: The Real Estate does the numbers in very helpful point-by-point format. In the end, it is still hard to come to a one-to-one conclusion, but we’re getting closer to at least seeing what the comparative value is.