Writing in today’s Post, New York Building Congress head Richard Anderson counsels Gov. Paterson against signing a bill that would change governance procedures at the state’s public authorities. One main complaint, which Anderson calls a “fatal flaw” that would help “cripple” the authorities:
The bill would eliminate each authority’s flexibility to sell properties for less than market value even when there’s a defined economic-development/urban-planning objective to be achieved. Both the city and state have sponsored a number of essential projects — including the Hudson Rail Yards, East River Science Park and Willets Point — that have relied on the government’s ability to negotiate the terms of a sale, rather than being forced to blindly accept the highest bid. Rather than encouraging such long-term thinking, the bill would eliminate opportunities to leverage billions of dollars in private investment and achieve far-reaching economic-development objectives.
But that’s actually one of the bill’s key selling points — and something that should stay in any future, better, public-authority reform bill.
To see what’s really crippling public authorities, look to the Atlantic Yards mess, chiefly the Metropolitan Transportation Authority’s recent deal to sell valuable acres of land in Brooklyn to basketball-stadium and condo developer Bruce Ratner, the private-sector sponsor of the project, for the super-low upfront price of $20 million, down from an original $100 million.
The MTA will also allow Ratner to make an in-kind payment of construction work on MTA property that’s far inferior to the original work proposed.
The Atlantic Yards deal is one of those “economic-development/urban-planning” projects Anderson wants to protect — but the public purpose of the project is not actually clear.
What is clear is that the MTA, for political reasons (Mayor Bloomberg and Gov. Paterson heavily support the Atlantic Yards project) is sacrificing a real public purpose: getting the most money it can get to fund its next multi-billion-dollar capital plan, which is far more important to the city’s private-sector economy than building some more empty condos is.
Requiring public authorities to sell their properties at market price doesn’t just help those authorities achieve their stated objectives. It also provides badly needed discipline to murky political projects.
If a city or state government wants to use authority land to achieve some sort of public purpose in concert with a private-sector developer, let the city and state subsidize the deal outright, with a joint bid with the private developer to make up for the part the private developer won’t fund (this is a bad idea, too, but it’s less bad than the other). Then, taxpayers would see the true cost of often poorly thought out econ-dev projects.