EDC forced to pony up their cash

From the NY Times:

Bowing to pressure from auditors, the organization that oversees economic development in New York City has agreed to hand over more than $20 million in rental payments each year to the city.

The group, the Economic Development Corporation, had previously resisted giving up the money, which it earns by leasing space in Times Square. But after Comptroller John C. Liu released a stinging audit of the corporation’s financial methods in April, officials re-examined the practice.

In explaining the reversal, the corporation said it was responding to Mr. Liu’s report — one of the first major salvos of his tenure as comptroller — as well as the dire economic circumstances facing the city.

David Lombino, a spokesman for the corporation, said the group had determined it would be “optimal” to cede the money so the city could “balance its budget and continue to provide valuable services to its people.”

Under Mayor Michael R. Bloomberg, the Economic Development Corporation has emerged as one of the city’s most powerful agencies. It is a nonprofit group that contracts with the city to manage a variety of projects in places like Coney Island and Willets Point, Queens. It earns most of its money by selling and renting property for the city. Its president is appointed by the mayor.

According to budget documents, the corporation will contribute $20.3 million in rental payments from the Times Square project to the city this fiscal year, $27.7 million in 2012, $32.5 million in 2013, and $39.9 million in 2014.

Mr. Liu, who took office in January, welcomed the decision, saying it was a victory for his office. He said the money should be subject to public scrutiny as part of the general budget.

“This is good news for our taxpayers,” he said. “The bottom line is that we just can’t afford for any city agency or entity to be holding onto these funds.”

Bad stadium deal by EDC screws City

From the Daily News:

The private developer chosen by the Bloomberg administration to run the new $340 million Yankee Stadium parking system is two years behind on its city rent.

As of this month, Bronx Parking Development LLC owes the city $8.7 million in back rent and interest. That tab will soon grow to more than $10million because city officials have allowed the firm to defer the rest of this year's rent as well.

Meanwhile, Bronx Parking, which has no connection to the Yankees, has yet to pay a nickel in property taxes.

When the city and state originally unveiled plans in 2005 for a new Yankee Stadium, they also agreed to increase the number of stadium parking spaces to 9,000 - a key condition of Yankees executives for staying in the Bronx.

The state contributed $70 million in cash for new garages, while the city donated park land and provided tax-exempt financing.

At the time, everyone promised the new garages would produce annual rent revenues for the city at least equal to the $3million the old garages generated. But deep in the fine print, the city inserted a provision that allowed the developer to defer any city payments in years where cash flow was insufficient.

"Last year, occupancy [for the garages] was lower than the analysis predicted," said David Lombino, a spokesman for the city's Economic Development Administration. "As the economy improves, we can expect that occupancy would improve."

Don't hold your breath.

Bloomberg administration creates its own Bizarro World

From the NY Observer:

Confronted Thursday with an Independent Budget Office report that alleges the centerpiece Nets arena is a net-money loser for the city—which is incentivizing the project with $169 million in discretionary subsidy—Mr. Bloomberg loudly hailed the project, implicitly comparing the private development to the city's finest public assets.

“I don’t know what the IBO studies would have shown back when they tried to establish the value of Central Park or Prospect Park or anything else,” he told reporters. “These are the kinds of projects you have to do because without that we don’t have a future, and we’re going to get this one done.”

From the Forum West:

“We believe the residents of Maspeth would benefit from more and better access to public parkland,” wrote Benepe. “While we could not justify the forcible acquisition of the site through condemnation, we would consider purchasing the land if the current owners are now willing sellers.”

Existing public parks: So valuable you can't put price tags on them.
Eminent domain to create new ones: Unjustifiable. Prohibited by the Bloomberg Doctrine.
Eminent domain to benefit private arena developer: Without it, we don't have a future.

And one parting shot from DDDB:

This is what happens when former reporters take up spokesman work—they look silly.

Dave Lombino used to report on Atlantic Yards, and other things, for the NY Sun, now he is a spokesman for NYC Economic Development Corporation. The Times has his response to the IBO study concluding that the Atlantic Yards arena is money loser for NYC:

...In addition, our investment was based on benefits that aren’t easily quantified, like job creation, affordable housing, school construction and open space — and all of this on a site that is now an open railyard without any public benefit,” he said. “That’s not in the report.” (Emphasis added.)

Perhaps that is not in the report because the site is not an open rail yard and the part that is a railyard has a benefit, just as the LIRR and its riders. Lombino knows better than that. He used to report, often skeptically, on the project.

Here is Lombino writing for The Sun in 2006 clearly acknowledging that the site is much more than an "open railyard." Maybe he just forgot.

Furthermore, why on earth would a fiscal analysis study non-quantifiable, illusory "benefits."