Shortchanging the Taxpayers
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
This morning, New Yorkers will be able to see whether the Metropolitan Transportation Authority’s board shortchanges them over the sale the Vanderbilt Yards in downtown Brooklyn. As our Daniel Hemel reports, the MTA’s 17-member board meets at 9 a.m. to consider bids for the 8.4-acre parcel of prime real estate opposite the Atlantic Terminal. Developer Bruce Ratner is offering $50 million and Extell Development Company is offering $150 million. Both are short of the $214.5 million at which the site was valued in an appraisal commissioned by the MTA.
Both bids would be in violation of legislation the state Assembly, at the behest of Assemblyman Richard Brodsky, passed in June. It requires public authorities to get the market value for their properties – but the legislation doesn’t kick in till January. Mr. Brodsky told The New York Sun the MTA should respect the legislation anyway, as “assets of the MTA belong to the people and should not be given away at below market value.” His legislation was simply putting into law what should have been obvious to board members in the first place.
Not only are both bids before the MTA shortchanging taxpayers, they also both seek taxpayer-funded subsidies. Extell wants $150 million, and Mr. Ratner $200 million. Mayor Bloomberg and Governor Pataki have already said they support Mr. Ratner’s bid and pledged in February $100 million each in direct subsidies if he wins the bid. These pledges were made before the MTA opened the site to bids in May, making it clear whom the governor and mayor want to win – perhaps why only one other company, namely Extell, was brave enough to enter the bidding.
We’ve expressed skepticism about other parts of the bids in the past, such as the “affordable housing” both now promise – Mr. Ratner much more so. The Ratner proposal also will ask the city to evict some adjoining landowners under eminent domain.
The role of the MTA’s board is to consider which of the bids offers the best deal for New York taxpayers. They have the choice to decide neither and reopen the bidding. As Mr. Brodsky told the Sun: “The MTA should not be acting in the name of social good or social evil. It’s not a development company, it’s a transit authority, and its only job is to get the full value for its assets.”
