Sunday, March 13, 2005

Memorandum Of Underwhelming

Perhaps the most unfortgivable aspect of this four-day drinking jag has been our lack of attention to the wider world. So while we were putting the finishing touches to the World's Worst Pub Crawl (the block between O'Connor's and Freddy's) we finally remembered something about a stadium. Probably the extremely handsome posters for the Harr-A-Thon to benefit the folks at Develop Don't Destroy.

The event that should have penetrated our alcoholic haze was the announcement of a memorandum of understanding between the city and Mr. Ratner about building a new stadium over my neighborhood. Suggest that you go to DDDB to get an idea of all of the juicy incentives that the city and state will be flinging at the project.

There will be the cash subsidies, there will be the use of emminent domain, there will be property tax holidays, and there will be the use of tax exempt bonds. This last is an interesting angle, one we have a track record in following.The city has handed the project over to the Empire State Development Corporation for the purposes of permitting the monstrosity, and to make sure is is pursued in the hacktacular manner of the hacktacular state government machinery. As far as we can tell, the development might be eligible for Liberty Bonds, which have had a chequered history, and might not be allowed for private projects.

But the bonds won't have a government guarantee, so Mr. Ratner will have to find a way to enhance the underlying economics of the project. We hope, at least, that potential bond buyers will be a little sceptical of Ratner's ability to create viable freestanding projects. This is the point where get to mention the futuristic, but awful, Metrotech Center and the awful, but not very pleasant, Atlantic Center. We can tell that the bonds will not be guaranteed by the non-profit holding company that the public authorities will use to own the site. And there's been a growing recognition amongst investors that stadium projects are not always solid prospects. Now it would probably be best if this thing did not get to the financing stage, but we do hope that Ratner's slew of dreadful developments might become a hurdle to raising the necessary cash.

In other news, Eliot Spitzer endorses the Brooklyn arena. Some commentators are outraged that Spitzer, who likes campaign contributions as much as any other politican, and who doesn't have to worry about antagonising the Dolans, like he does on the West Side Stadium, might be taking this position. We say that unless much broader swathes of Brooklyn opinion swing against the stadium, he'll be happy to take this line, and most Democrats will join suit.


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