We wuz robbed!
With that broiling grievance in mind, the NYPIRG Straphangers Campaign joined in a lawsuit this week objecting to the rotten deal that the Metropolitan Transportation Authority struck this past June for the rights to build over the Vanderbilt Yards in Brooklyn.
If this deal goes ahead - with the Forest City Ratner company - it will mean scores of millions less for the MTA's upcoming critical five-year capital plan, from buying new subways and buses to repairing the transit system's infrastructure, such as signals, track and stations.
Most of the facts of the case are not in dispute.
In 2005, the MTA agreed to sell the valuable air and related property rights for its Vanderbilt Yards in downtown Brooklyn. The price tag was $100 million in cash at the time of closing by Forest City Ratner, a real estate development firm that wants to build a basketball arena and a big commercial and residential complex at the site
It was a bad deal at the time, with the MTA's own appraiser valuing the project at $214 million in 2005. (Initially, Forest City Ratner offered only $50 million for the property. But its proposal had to be increased when another developer offered $150 million.)
But it gets worse ...
In June of this year, Forest City Ratner came back to the MTA with a new deal: Instead of $100 million in cash at closing, the MTA would now receive $20 million and then installments on $80 million over 22 years from FCR at 6.5% annual interest.
Incredibly, the MTA agreed.
Could the MTA have gotten a better deal on behalf of its riders, given the fiscal climate? We don't really know because the MTA ignored two state law requirements that are in the Public Authorities Accountability Act of 2006.
The first is to have the value of the property appraised, with the appraisal included in the record. A four-year-old outdated appraisal coupled with a very low selling price just doesn't fulfill the requirements in state law.
The second is to encourage a competitive process for selling their property rights.
The MTA chose to do neither in 2009. And that was wrong.
For the Straphangers Campaign, the main issue in the case - titled Montgomery v. MTA - is for riders to get the best deal on adequate funding, not to subsidize a private developer.
So this is why we are suing the MTA and standing proudly alongside area politicians who are co-plaintiffs - State Senator Velmanette Montgomery, Assembly Member Jim Brennan, Assembly Member Joan Millman, and Council Member Letitia James.
The suit was filed in State Supreme Court in Manhattan. And it seeks the annulment of the MTA's deal to sell the rail yard to Forest City Ratner because of its violation of requirements of legislation meant to rein in the abuses of New York State's public authorities.
One last note: The Straphangers Campaign does not have an overall position on the merits of the Atlantic Yards.
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