Subsidizing NJ Nets NBA Arena in Brooklyn while NYC cuts 3,000 employees

With Sean Mills return as an Orange Juice blogger, and as we share a love of New York area sports, I thought I might cover a sports related “eminent domain” story from the East coast.

When I attended the Institute for Justice/Castle Coalition conference in Arlington, VA two years ago I met over 100 victims and victors engaged in the fight to protect private property rights when the owners had no desire to sell. One of the people I met that weekend gave me some information on a pending major redevelopment project in Brooklyn, New York called “Atlantic Yards” that will include an Arena for the New Jersey Nets NBA basketball team.  The flyer headline reads: Boondoggle Basics. Understanding Bruce Ratner’s “Atlantic Yards” Proposal.

“Atlantic Yards will contain 17 skyscrapers and an Arena that will cost taxpayers nearly $2 billion, according to independent analysis.. While the Arena is most of what you hear about the project, it is a very small part of this plan. 90% of the scheme is skyscrapers which would rise up to 53 stories high, taller than the iconic Williamsburg Savings Bank, and cast shadows as far as DeKalb Avenue in Fort Greene..The project will fill seven large blocks ,…almost 1.5 times the size of the entire World Trade Center site.”

Another flyer show subsidies exceeding $2 billion dollars of which $205 million is direct cash from New York City, $100 million in direct cash from New York State, $360 million based on a 30 year, full property tax Exemption (if the lease runs for its full term of 99 years, the abatements would exceed $1 billion), Tax-Exempt and Taxed Bonding for the Arena another $637 million, etc.

To paint the full picture bear in mind the current headlines from NYC where, due to the economic downturn and lay off on Wall Street, Mayor Michael Bloomberg has plans to slash 3,000 jobs to address their billion dollar deficits. Part of his proposal is to cancel a class of 1,000 police cadets.

“Federal tax officials ruled this week that the developer of a billion-dollar basketball arena for the Nets at the Atlantic Yards project in Brooklyn can use tax-exempt bonds to pay for the building, providing some rare good news for the delay-plagued project. The ruling would also allow the Yankees and the Mets to issue a new round of city-issued tax-exempt bonds worth hundreds of millions of dollars for their new homes in the Bronx and Queens,” In learning of that action NY Democratic Assemblyman Richard L. Brodsky recently stated that “critics of public subsidies for sports teams were dismayed by the long-awaited ruling. “This is the same kind of socialism for the rich, and capitalism for the rest of us that’s gotten us into the current economic mess.”
Now let’s hear from the “blighted” neighborhood:  “I’m not giving up my family’s house,” Mr. Campbell said. But he added that he’s not “overly bothered” by the threat from Atlantic Yards because any eminent domain action will have to be based on a finding that the neighborhood is blighted — which it clearly isn’t. Condos priced at a million and a half dollars are selling down the street. “By Ratner’s definition, half of Brooklyn would be blighted.”

A representative named Andy from Mr. Ratner’s organization called him a few months ago, Mr. Campbell said. He was “gloriously ambiguous,” saying that they regretted that they had taken his house but they would find him a far better one. But you haven’t taken my house, Mr. Campbell recalled saying, and you’re not going to. “Nothing has happened, and we have no interest in leaving.”

A real estate agent at Brooklyn Properties, Suzanne DeBrango, said Mr. Campbell’s house would be priced at around $2 million. Her firm has a nearby newly renovated, mint two-family brick double duplex priced at $1.95 million. Like Mr. Campbell, she was outraged at the contention that the neighborhood is blighted. “If $2-million houses mean blight, what wouldn’t be blighted?” she asked. She wants to see the area developed, but with “respectful, contextual development,” not 60-story towers, and “certainly not an arena.”

Mr. Campbell’s immediate neighbor, Ioana Sarbu, paid just over a million for her house, also from the 1830s, in July of last year. Originally from Bucharest, Ms. Sarbu planted window boxes — “I wanted something to hang and be gorgeous and smell gorgeous” — to remind her of Romania. No one from Mr. Ratner’s organization has contacted her, so she is both apprehensive and relieved. “Why would we sell?” she asked. “We love this block.”

From the Atlantic Yards web site, their spin cycle reads:

“Welcome to Atlantic Yards, the development dedicated to building a new vision for downtown Brooklyn and creating an exciting new home for Brooklyn’s very own NBA franchise: the Brooklyn Nets.

This development is not just about basketball. Atlantic Yards will be a dynamic mix of affordable, middle-income and market-rate housing, commercial offices, retail establishments and a boutique hotel surrounded by over 8 acres of beautifully landscaped publicly accessible open space. In order to blend masterful design with Brooklyn’s continuing growth and unique character, the developer, Forest City Ratner Companies (FCRC), has hired world-renowned architect Frank Gehry and landscape architect Laurie Olin to oversee the design of the development.

Atlantic Yards is a $4 billion investment in Brooklyn’s future. While it may mean different things to different people–a home, a job, a community resource, an entertainment venue–it will be something special for everyone. We invite you to learn more, and ask questions about what Atlantic Yards will mean to downtown Brooklyn.”
Gilbert note: Should this project proceed as proposed it will be an east coast version of what created Chavez Ravine for the LA Dodgers. Larry, it’s called progress!

Current status:  Pending litigation info can be found here:

From you can read that  “New York has three major daily papers all competing for readers, advertisers and power. This should lead to great coverage of major stories – but in the case of one story at least, it hasn’t. Atlantic Yards is one of the biggest real estate developments in the city’s history, yet the three papers have barely scratched the surface. In this piece we examine how government collusion with the developer and the developer’s business ties to the paper have resulted in a half-told story that’s failed to serve the public interest.”

That is where bloggers must enter the scene. We need to expose these abuses and support those who could be the next victims of eminent domain takings for the “public good.”
We have two problems in the Atlantic Yards project. First the taking of private property when owners do not wish to sell. The second being the subsidizing of multimillion dollar arenas for wealthy developers and team owners whose pockets are much deeper than ours.
Perhaps we can create legislation similar to auto dealers who steal franchises from one city to a neighboring city in CA where they now have to share sales taxes. When a major sports franchise skips out of town perhaps the new city should be forced to share some percentage of its’ new found revenue for a preset period of time with the former location city.

Let me close with a quote from NY city councilman Yassky.  “My fear is that when you make property subject to condemnation you deter private investment in the property and it deteriorates over time,” said Yassky. “Even if ultimately there is no condemnation you condemn the area to blight.”

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