According to an MTA spokesman, on Monday morning the transit agency will be “presenting a revised agreement” with developer Bruce Ratner for the Atlantic Yards site. The schedule change in itself is an interesting revision: Originally the MTA was going to wait until a meeting of its board on Wednesday to reveal the new deal, and then move straight to a board vote. But State Senator Bill Perkins, among others, has been pushing for more transparency about the revised deal, and this appears to be an attempt by the much-maligned state agency to marshal support in advance of the board’s decision.
The MTA needs all the goodwill it can get, because it’s likely to give Ratner an enormous discount from the original $100 million he agreed to pay to build on state land. The developer is arguing that he deserves the price cut because Atlantic Yards has been hobbled by recession and by pesky lawsuits. Yet Ratner was campaigning for increased taxpayer subsidies from the city and state even before the economic downturn. Now his project has dwindled severely. Gone is the glossy Frank Gehry design; the other great selling point, below-market-rate housing, won’t arrive anytime soon, if ever. What’s left is a drab, bargain-basement basketball arena at the corner of Flatbush and Atlantic Avenues. Ratner is desperate to get shovels in the ground by the end of 2009 or he’ll risk losing his existing tax breaks and sponsorship arrangements.
The MTA has its own money problems, as you may have heard. And the sweetheart deals the city and state cut for the new Yankee Stadium should provide a lesson in driving a hard bargain when it comes to sports arenas. But the MTA appears willing to settle for a drastically reduced price in order to salvage some kind of short-term development at Atlantic Yards: Sources say the new price tag is likely to be either $20 million upfront or $10 million per year for ten years.
As disappointing as the cash may turn out to be, there’s another significant change in the works. “The thing to watch is whether the MTA gets screwed on the rail yards,” one party to the negotiations says. Ratner had agreed to build a new and improved rail yard for the LIRR. But he’s trying to cut back there, too, possibly delivering a new yard with 25 percent less capacity than the existing facility. “That would be a real loss,” the official says. “Ratner is supposed to build a rail yard that’s worth $200 to 300 million.”
Next week’s public MTA meetings will produce impassioned argument on both sides. The train may already be out of the barn, however. Though transit-agency executives have been negotiating the fine points with Ratner’s representatives, the serious deal-making has taken place in Albany. “Ratner’s people don’t lobby at the MTA board level, or even the MTA executive level,” a state government insider says. “They just try to do business right through the governor, and expect that the governor will tell the MTA what to do.” Governor David Paterson has been preoccupied with Albany’s State Senate circus for the past two weeks. Let’s hope he pays some attention to Brooklyn before the next great land-grab goes through.
