Assemblymember Jim Brennan (D-Bklyn) testified today at the MTA Board meeting in the public comments session regarding the proposed Board action to modify the terms of the Atlantic Yards agreement signed in 2005 between Forest City Ratner and the MTA. The proposal would allow a reduction in payment by Forest City Ratner for the arena site from $100 million to $20 million, with an additional $8 million by 2016 and $165 million spread over 15 years from 2016 to 2031.
Brennan said the failure to include an independent appraisal prior to voting on the proposal violated the Public Authorities Accountability Act of 2005, which specifically requires that a public authority like the MTA conduct an independent appraisal prior to disposing of its property to assure fair market value to be paid for assets of public authorities.
Brennan said the purpose of the statute was to prevent public authorities from squandering assets in giveaways to the private sector.
Brennan said it was likely the MTA was squandering its assets to the detriment of the mass transit system, since in 2005 another bidder on the arena site and rail yards, the Extell Corporation, had already offered the MTA more money than what became the agreement between Forest City Ratner and the MTA at that time.
Brennan said the likelihood that the arena project was a boondoggle was substantial, since the New York City Independent Budget Office (IBO) has already testified at a hearing of the State Senate Corporations Committee on May 29th that a preliminary updated review of the costs and benefits of the arena showed that city and state outlays for the project would exceed positive tax revenues from the project even over a 30-year period.
The NYC Independent Budget Office has agreed to undertake a further review of the Atlantic Yards Arena and possibly other aspects of the project, following a request last week from Brennan and five other elected officials representing the site and surrounding areas.
Brennan indicated that an appraisal of the site was essential prior to the MTA signing off on a deal. Brennan chairs the Assembly Cities Committee and is a senior member of the Assembly Standing Committee on Corporations, Authorities and Commissions.