jake · 2004-12-16 Article: Mike's W. Side crap shoot
[quote]
New York Daily News - http://www.nydailynews.com
Mike's W. Side crap shoot
Thursday, December 16th, 2004
Mayor Bloomberg's ambitious West Side redevelopment project will be one-third costlier and much riskier to taxpayers than if done through the city's normal capital budget process, a City Council finance committee revealed yesterday.
Bloomberg's plan calls for a newly created Hudson Yards Infrastructure Corp. to spend $3.5 billion to pay for an extension of the No. 7 subway line, a network of new parks and pedestrian boulevards, and a deck over the MTA's eastern rail yards to spur a slew of new office buildings and thousands of mostly luxury housing units.
The bonds would then be repaid from future revenues from the 59-square-block site.
But the project will cost $1.3 billion more in debt service than if the city financed it through its normal capital budget, a report by the Council's financial experts concluded.
"You have to spend money to make money," Deputy Mayor Daniel Doctoroff told Council members when they questioned him about complex financing scheme.
"We are not denying that we are breaking new ground," said Doctoroff, who called it a "creative financial plan."
But several Council members pointed out that this project is not just creative. It also entails great risk.
According to the Council analysis, revenues will not be sufficient for annual debt service until at least 2020. Until then, the Hudson Yards corporation will have to borrow millions each year in short-term loans just to pay the original bonds.
It's like running up a big credit card debt, then getting a cash advance from another credit card company to pay the monthly interest on the first credit card.
By the time 2020 rolls around, and Hudson Yards has enough revenue to meet annual payments on its original bonds, it will then have to float another $1 billion in 25-year bonds just to pay off its short-term borrowing.
In other words, payments for Bloomberg's project will continue for more than 40 years.
And during that time, the city's little-known Transitional Finance Authority, which collects all city property tax revenues, will have to guarantee a big portion of the bonds.
That means, if interest rates skyrocket, or the real estate market crashes, taxpayers will be stuck with the tab.
The only ones laughing will be the Wall Street firms and bondholders, who always get paid first, no matter what.
Doctoroff argues that Manhattan's far West Side is a blighted area. Once developed, he says, it will be a gold mine.
But there's a reason the area has been blighted for so long, say many community leaders. For the last 10 years, first Mayor Rudy Giuliani, and now Bloomberg, have frozen development by pushing to build a stadium - for the Jets and the city's 2012 Olympic bid - with public funds.
The stadium and its $1.4 billion price tag was not even part of the discussion in Council this week. Bloomberg and Doctoroff don't want the Council involved because they know the stadium would go down to defeat again.
But the stadium is an integral part of this development plan, about which Bloomberg wants as little democratic discussion as possible.
So he and Doctoroff lock the City Council out of the stadium talks, and they create a new Hudson Yards Infrastructure Corp. to keep the Council away from that, too.
It won't work.
Yesterday, five major city civic groups, including the Regional Plan Association and the Citizens Union, condemned the mayor's undemocratic approach. They called for the city to solicit competing proposals for the rail yards.
Hudson Yards is the most critical land-use decision in this town in decades, and there should be no sweetheart deals - for the Jets or anyone else.
The Council can force dramatic changes in this plan if its members don't cave in. Council Speaker Gifford Miller, who wants to be the next mayor, should know everyone is watching him on this one.
[/quote] http://www.nydailynews.com/news/local/story/262470p-224740c.html
jake · 2004-12-18 This Is Opinion -- Not News
Remember, this is opinion, not news.
Gonzalez is a columnist, not a reporter.
The NY Daily News is a supporter of the New York Sports and Convention Center, for which I do thank them. http://www.nydailynews.com/news/col/jgonzalez/
jake · 2004-12-16
[quote] New York Daily News - http://www.nydailynews.com Mike's W. Side crap shoot Thursday, December 16th, 2004 Mayor Bloomberg's ambitious West Side redevelopment project will be one-third costlier and much riskier to taxpayers than if done through the city's normal capital budget process, a City Council finance committee revealed yesterday. Bloomberg's plan calls for a newly created Hudson Yards Infrastructure Corp. to spend $3.5 billion to pay for an extension of the No. 7 subway line, a network of new parks and pedestrian boulevards, and a deck over the MTA's eastern rail yards to spur a slew of new office buildings and thousands of mostly luxury housing units. The bonds would then be repaid from future revenues from the 59-square-block site. But the project will cost $1.3 billion more in debt service than if the city financed it through its normal capital budget, a report by the Council's financial experts concluded. "You have to spend money to make money," Deputy Mayor Daniel Doctoroff told Council members when they questioned him about complex financing scheme. "We are not denying that we are breaking new ground," said Doctoroff, who called it a "creative financial plan." But several Council members pointed out that this project is not just creative. It also entails great risk. According to the Council analysis, revenues will not be sufficient for annual debt service until at least 2020. Until then, the Hudson Yards corporation will have to borrow millions each year in short-term loans just to pay the original bonds. It's like running up a big credit card debt, then getting a cash advance from another credit card company to pay the monthly interest on the first credit card. By the time 2020 rolls around, and Hudson Yards has enough revenue to meet annual payments on its original bonds, it will then have to float another $1 billion in 25-year bonds just to pay off its short-term borrowing. In other words, payments for Bloomberg's project will continue for more than 40 years. And during that time, the city's little-known Transitional Finance Authority, which collects all city property tax revenues, will have to guarantee a big portion of the bonds. That means, if interest rates skyrocket, or the real estate market crashes, taxpayers will be stuck with the tab. The only ones laughing will be the Wall Street firms and bondholders, who always get paid first, no matter what. Doctoroff argues that Manhattan's far West Side is a blighted area. Once developed, he says, it will be a gold mine. But there's a reason the area has been blighted for so long, say many community leaders. For the last 10 years, first Mayor Rudy Giuliani, and now Bloomberg, have frozen development by pushing to build a stadium - for the Jets and the city's 2012 Olympic bid - with public funds. The stadium and its $1.4 billion price tag was not even part of the discussion in Council this week. Bloomberg and Doctoroff don't want the Council involved because they know the stadium would go down to defeat again. But the stadium is an integral part of this development plan, about which Bloomberg wants as little democratic discussion as possible. So he and Doctoroff lock the City Council out of the stadium talks, and they create a new Hudson Yards Infrastructure Corp. to keep the Council away from that, too. It won't work. Yesterday, five major city civic groups, including the Regional Plan Association and the Citizens Union, condemned the mayor's undemocratic approach. They called for the city to solicit competing proposals for the rail yards. Hudson Yards is the most critical land-use decision in this town in decades, and there should be no sweetheart deals - for the Jets or anyone else. The Council can force dramatic changes in this plan if its members don't cave in. Council Speaker Gifford Miller, who wants to be the next mayor, should know everyone is watching him on this one. [/quote]Article: Mike's W. Side crap shoot
http://www.nydailynews.com/news/local/story/262470p-224740c.html