Bond offering documents for the controversial Atlantic Yards development in Brooklyn will go to the issuer’s board for approval tomorrow. If approved, the bonds may be sold before the end of the year and the proceeds put into escrow while ongoing legal challenges continue in the courts.
The Brooklyn Arena Local Development Corp., a subsidiary of the Empire State Development Corp., plans to issue $700 million of tax-exempt bonds on behalf of developer Forest City Ratner Cos., which seeks to build a basketball arena as part of a larger housing and commercial development.
The Internal Revenue Service no longer permits the kind of payment in lieu of taxes bond scheme for sports facilities that the arena relies on, but the project was permitted provided the bonds are issued by the end of the year.
Ratings for the bonds were not available last week.
The project faces multiple lawsuits, including one that challenged the use of eminent domain to seize private property on behalf of the private developer.
Another lawsuit was filed in state supreme court in Manhattan last week by city and state lawmakers as well as several community organizations.
The action alleged that the ESDC’s approval of a modified general project plan for the project in September required a new supplementary environmental impact study.