Playgrounds for the rich

York Restoration Corporation Rockaway

The Rockaway Ferry is sinking quick

A recent article from the NY Daily News about their shutting down a shuttle from Rockaway Beach to Manhattan had this to say:

Deputy Mayor Howard Wolfson explained to the packed room of riders at the Belle Harbor Yacht Club how the city was subsidizing nearly $20 per passenger trip on the ferry. Wolfson noted this was a far cry from the 56 cents per subway ride the city provides in subsidies for each straphanger.

“The clear metrics that were established to determine whether or not this would be a success have not been met,” Wolfson said.

So what are the clear metrics that were established? What makes this a success or a failure, according to the Mayor’s office? Why is the city’s subsidizing of the ferry a failure when the financial exceptions made for the creation of a baseball or football stadium is deemed a success?

York Restoration Corporation, Atlantic Yards Imagination

A mock-up of the Atlantic Yards project

According to a press release from Forest City Ratner, the Atlantic Yards project will bring in 25,000 construction and permanent jobs. The release quotes Mayor Bloomberg:

“The Barclays Center at Atlantic Yards is the first piece of what will be one of the largest private investments and job generators in Brooklyn’s history,” said Mayor Bloomberg. “The world-class arena will bring the Nets to Brooklyn, and the entire project will bring with it more than 25,000 construction and permanent jobs, thousands of units of affordable housing, and tremendous economic activity. Now more than ever, we need investments that create jobs and help build for New York City’s future, and Atlantic Yards is as significant an example of that as there is.”

The city has – so far – provided over $305,000,000 in subsidies to the Atlantic Yards project, as well as backing off their requirements that Forest City Ratner pay for MTA transportation improvements, like reducing FCRatner’s initial financial obligation for the Vanderbilt Yard from $100 million to only $20 million. The New York Post sets the total loss to the city at $2.1 billion.

Wrapped up in all of this is the additional funding from the city for the “affordable housing” in the new sky rises, as well as favorable deadlines and penalties for completion of the various phases. The city is in a position to “require” the towers have “low-income” housing (officially defined as persons making less than $32,000 a year, which is a strange designation when the official “living wage” that Bloomberg signed into law is only $8.10/hour), but then pay the building’s owners a stipend for having the low-income units. Furthermore, it was announced that only 12 percent of the housing planned would be affordable to people making below $32,000.

We’ll be spending about $84,000 for each job created. Maybe not so bad if all those jobs were permanent; unfortunately, however, many of those jobs are swallowed up by one-time construction workers. You’d also have to factor in the fact that most of the jobs are seasonal, that the company running the concessions – Levy Restaurants, Inc – is based in Chicago and Charlotte, that many of the multi-millionaire players and coaches won’t necessarily live in New York City, or even the state, and things start to look a little more dingy.

York Restoration Corporation Yankee Stadium Overhead

Beautiful, but boondoggle nonetheless

Let’s compare this to the latest build in nearby Bronx. Here’s an excerpt from a recent analysis:

New York City released two of dozens of documents sought by the Assembly Committee on Corporations, Authorities, and Commissions that relate to the City’s attempt to give the Yankees an additional $430 million of taxpayer money for the construction of the new Yankee Stadium. The Yankees have already received an excess of $1.5 billion of taxpayer money.

These two documents are the Yankees’ application to the NYCIDA, which the City and the NYCIDA have had since December 11, 2008, and had previously refused to release, and a cost-benefit analysis which is part of the NYCIDA process. The documents reveal that the $2 billion in taxpayer subsidy will yield an total increase of full time employment at the new Stadium of only 22 jobs, that the average wage of employment at this subsidized project is $34 million per year, that the largest single uses of the new monies are for a large television and audio-visual system, concessions, Yankee’s administrative offices, and other accoutrements.

And then there’s the opportunity cost of selling this land to a stadium who won’t be paying as much in property taxes as a spread of regular everyday office buildings, or residential apartments. For example, New York City is missing out – in mortgage taxes alone – on $8 million because of the subsidies it offered to the new Yankee Stadium. Meanwhile, the state’s missing $14 million.

Meanwhile, New York is running a $10 billion deficit, and Governor Patterson is asking for the right to furlough “non-essential” government workers one day a week.

While the state will “officially” own the stadium, Ratner will lease the stadium for $1 a year. You put a single two-story home in that giant block of property, and you’d make more money in property taxes than the stadium will. While the stadium is publicly owned, the team will pocket the hundreds of millions in naming rights for the stadium. Think “CitiField” instead of Shea, or “Minute Maid Park” nee Enron Field nee Astros Field.

And then, there’s this:

Their deal [the one that’s netted them $48.2 million through 2009 – ed.] with the IDA lasts until 2046. According to the IDA’s latest job assessment report, that controversial stadium currently has 3,621 full time jobs — about 1,300 more than the old stadium, according to one estimate.

We paid out anywhere between $400 million to $2 billion in subsidies for the Yankees to add only 1,300 jobs. Sure, we got a pretty new stadium out of the deal. But try walking in there without shelling out $40 or so. Seems like a big open field would be a better deal. At least I wouldn’t have to pay half a day’s salary for the right to sit in the grass that my taxes bought.

Obviously, this is a done deal, and there’s no halting money from influencing a business-first city hall, but let’s not fall over each other trying to celebrate a if not corrupt, then certainly shady dealing. Atlantic Yards will be the next swanky condo highrise, and an obscenely rich Russian playboy gets a new home for his basketball team. Meanwhile, we’re all paying more for much less in our subways, and Rockaway Beach loses its ferry.

So let’s get back to the original question – at what point does the subsidy become silly? Why is the metric used for public transportation seemingly thrown into the bin when we look at stadium construction, or expensive condo units? Why does the MTA shut down umpteen bus lines and an entire subway line because of budget cuts, and how can we then afford to foot the bill for Forest City Ratner’s Atlantic Yards development? How can the deputy mayor say on one hand that the subsidies for the Rockaway ferry are untenable, but on the other, that Yankee Stadium was a giant success and boy-oh-boy Atlantic Yards is going to be an even bigger one?

I think we’ve gone past silly into surreal.

This post brought to you by York Restoration Corporation

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One Response to “Playgrounds for the rich”

  1. Jan Says:

    Nice job, York. Goes to show that the grand divide is still alive and well and growing.

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