US News

YOUR ‘NET’ LOSS

Developer Bruce Ratner’s Atlantic Yards project in Brooklyn is boosted by so many sweetheart deals that the public stands to pay for more than half the cost of his controversial $4 billion plan, a Post analysis found.

BREAKDOWN: Ratner’s Nets Gain

The project – which would bring an NBA arena and 16 residential and office towers to Prospect Heights – is in line to receive at least $2,157,260,000 worth of government subsidies, according to project records and interviews with past and present state and city officials.

And the developer is gearing up to ask for even more corporate welfare.

The president of Ratner’s parent company said in a conference call with investors last week that the project will “still need more” subsidies.

The state and city say Ratner has yet to ask for extra assistance, but the developer last month admitted that a sagging economy is holding up construction of the project’s residential and office space.

Among the biggest revelation of the Post analysis is what project skeptics have feared for years – that Ratner can build the planned 18,000-seat arena for his New Jersey Nets to move to with little financial risk.

“The setup is basically like paying taxes on your home and then having the government use that money to help you pay off your mortgage,” said Michael D.D. White, a former vice president and top lawyer for the state finance authorities.

White – who provided the newspaper with subsidy projections based on his own review of project documents –estimates that Ratner would save slightly over $1 billion in tax payments through a Payment in Lieu of Taxes deal with the state.

Under the deal, he said these payments would be “intercepted” and go directly towards settling debt service on state bonds to build an $950 million arena that Ratner will “all but own,” with remaining cash going towards arena operating costs.

While the state will technically own the arena, Ratner under a cozy $1-a-year lease deal, will control it and all its potential profits.

Anticipated arena financial windfalls include a record $400 million naming-rights deal signed with Barclays Bank and up to $35 million annually through the sale of luxury suites.

Ratner has an option to buy the arena at market value after 30 years, records say. But it doesn’t pay because the average life span of an NBA arena is about three decades, and he is eligible to continue the buck-a-year lease arrangement for up to 99 years.

Other benefits for Ratner include:

* Saving $261.25 million in taxes through tax-free bonds that will finance affordable housing, White said.

* $150 million in tax credits through special state legislation set up to benefit Atlantic Yards, officials said.

* Saving $114.5 million buying the Atlantic Rail Yards site for the project at less than the MTA’s own appraised price.

Ratner spokesman Loren Riegelhaupt refuted most of the subsidy estimates made by White and the Post, adding “it is too early to know” the exact tally and that the only subsidies currently guaranteed are $305 million coming from the state and city for infrastructure and land-acquisition costs.

“Yes, there’s investment from the city and state, but what they get back is even greater,” he said.

He added that the entire project will eventually be built and bring in nearly $1 billion in net tax revenues over the first 30 years, create over 21,000 permanent jobs and construction jobs and 2,250 units of affordable housing for low- and middle-income families.

Assemblyman Richard Brodsky (D-Westchester) warned that Ratner must deliver what was promised when the state approved the project in December 2006.

“All the big projects — the 7-line, downtown Manhattan, Hudson Yards, Atlantic Yards — they’re all hanging by a tread, and the notion the taxpayers are going to invest money while the developers don’t meet their commitments, if that’s what people expect, there is going to be a fight about it,” said Brodsky, who chairs the Assembly committee that oversees state entities that approved these projects.

Spokespersons for the city and state said it’s unclear whether Ratner would receive more subsidies if he asked, adding it would need to be reviewed. But some Brooklyn-based council members have said their dead set against giving Ratner more cash.

While Riegelhaupt said Ratner plans to break ground on the arena and one of the residential towers later this year, construction on other parts of Atlantic Yards is being pushed back because of the downtown in the economy.

Project opponents, however, are still attempting to block the entire project through pending lawsuits.

rich.calder@nypost.com