Senior executives say the darndest things. On a recent earnings conference call of the $10 billion real estate giant Forest City Enterprises, its chief officers made a number of statements that provide insight into the company’s stance on subsidies. When asked about a Lower Manhattan residential project receiving liberty bond financing, the company’s new CFO stated, “That’s the beauty of the liberty bonds, tax-exempt rates and all market-rate units.” Ah yes, the beauty of receiving public money without providing public benefits. But it was CEO and President Charles Ratner’s statement that they “still need more” subsidies for Brooklyn’s controversial Atlantic Yards project that received wide attention.
Watchdog blogger Norman Oder first reported on Forest City’s claimed need in his Atlantic Yards Report. Others soon picked up on the CEO’s statement that despite the initial $200 million in direct subsidies the company was promised from the city and state, and the additional $105 million in subsidies it has secured in the past few months, it’s still looking for more. This comes at a time when news sources are reporting that the developer expects the slowing economy to stall a number of components of the project, including much of the affordable housing (while prioritizing the arena). Councilmember Bill DeBlasio told the Brooklyn Paper, “There has already been very generous public investment…I don’t see how we can go any farther.”
In the conference call, Charles Ratner praised his company saying, “We’re one of the few in these places that continue to offer opportunities for development to these major urban markets (in New York and elsewhere).” The notion that other developers would not be interested in the places Forest City chooses is clearly questionable. It is true that across the country Forest City looks to develop mixed-use projects in transit accessible urban areas. However, as Greg LeRoy discusses in his recent article TIF, Greenfields and Sprawl, the benefits of such development can easily be outweighed by costs to schools and public services when such projects are publicly financed.
Officials everywhere take note: If Forest City has gotten its snout in the public trough, there comes a time when it needs to be told that enough is enough.