BY Neil deMause

Neil deMause is co-author of "Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit."

May 25, 2004

With each passing week, it seems, developer Bruce Ratner takes another step toward landing the New Jersey Nets in Brooklyn. Most recently, condo owners in the path of Ratner's bulldozers say they've been offered million-dollar-plus buyouts - accompanied by "gag orders" prohibiting them from speaking out against the arena, or even giving money to anti-arena groups.

If Ratner succeeds in buying the silence of some of his most vocal opponents, it will be a shame, because now is when debate is most needed on one still-missing piece of the puzzle: the hundreds of millions of taxpayer dollars that Ratner is seeking in exchange for plunking down a basketball arena, four office towers and an upscale housing development on the northern edge of Prospect Heights.

The money, insists Ratner, is worth it to the public. Recently his hand-picked economic consultant, Smith College's Andrew Zimbalist, issued a report that while the project would cost the public just under $700 million, it would generate $1.5 billion in new state and city taxes.

Bringing the Nets to Brooklyn, proclaimed the resulting headlines, would not only give New York a second NBA team, but leave taxpayers with a handy $800 million profit.

Well, not exactly. A closer look at Zimbalist's report reveals that the Nets arena itself would likely be a money-loser for taxpayers. Using his best guesses at how many current Nets fans would make the trek to Brooklyn instead of staying home and spending their consumer dollars in the Garden State, Zimbalist estimates $257 million in new sales and income-tax revenue from the arena, against construction costs of $261 million. Other reports have projected a public construction subsidy of more than $400 million. Asked repeatedly at recent City Council hearings what the real cost would be, city economic development chief Andrew Alper wore out his Roget's finding new ways to say, "We don't know."

And that's just to build the arena itself: clearing land, decking over the LIRR tracks and reimbursing homeowners for their demolished homes are slated for another $187 million, a large chunk of which would go to make way for the arena. The Nets piece of the project, the report makes clear, could leave taxpayers with tens if not hundreds of millions of dollars in red ink.

None of this should come as any surprise. Sports finance experts - including Zimbalist - have long noted that sports facilities provide a terrible bang for the buck. That projected $800-million windfall, it turns out, would result largely from the 4,500 units of housing that Ratner wants to build. According to Zimbalist, each new apartment will produce $193,000 in new sales and income taxes for the state and city, as residents filter out into the surrounding neighborhoods to eat dinner and buy toilet paper and do all the other unexciting things that keep the city economy rolling.

Which raises an obvious question: If the arena is a dog and the housing a winner, why not ditch the hoops and carpet the rail yards with apartment buildings? On the face of it, this would certainly solve lots of problems. The only reason Ratner needs to raze buildings along Pacific Street, evicting several hundred Brooklynites in the process, is to make room for the Nets: try to build a NBA arena on the 200-foot-wide rail yards alone, and the courtside seats are going to be in somebody's lobby. Housing towers, though, can be built to fit any space - eliminating the need for evictions and for the eminent-domain costs that would accompany them.

Moreover, once you lose the arena component, the city's options are suddenly wide open: Instead of having to deal with Ratner because he's the only developer with an NBA franchise in his back pocket, the city could throw open the process to public bidding. If it's such a lucrative site for housing, as Ratner insists, maybe the city could even find other developers willing to build there without such a large public subsidy.

The irony of all this is Ratner is widely believed to have only picked up the Nets as leverage to get his hands on the rail yards, so as to expand his faltering retail empire that began with the Atlantic Center mall complex across the street. As a result, we have the spectacle of Mayor Michael Bloomberg and Gov. George Pataki preparing to build a basketball arena so that politicians can parade about in Brooklyn Nets caps instead of construction helmets to celebrate boring old housing.

It's so absurd, it's almost funny. But for $700 million in tax money, you'd hope for a slam dunk.

Copyright © 2004, Newsday, Inc.