Another letter regarding the iStar/IDA/Cost Benefit Analysis. This one comes from a resident named Neal:
The cost/ benefit analysis performed by Camoin Associates for the Nassau IDA is more remarkable for what it failed to examine than for the metrics and attempt to quantify that it provided. We already knew that all the municipalities would benefit financially and that some jobs would be created by granting the tax abatement versus the status quo of the current tax assessment on the undeveloped property. But where is scenario 3 in this analysis? What about measuring the proposal versus I Star’s presentation to our zoning board suggesting that this shovel ready, fully capitalized project simply needed a variance for height/ density in order to be financially viable? What about exploring I Star’s profitability argument against the market realities of rock bottom interest rates, the low cost basis for I Star’s acquisition of the property, and the present and projected high demand and strong market for luxury apartments in settings that enable active lifestyles and transit access to NYC? Karl Frey, I Star’s Exective VP told members of our civic associations that IStar was looking for a 5% return on their investment. When asked if IStar would split any overage with Long Beach, he wouldn’t commit. How much would I Star need to raise its proposed rents on 528 apartments to achieve their target profit margins without applying for the $109M tax abatement ?
This report, even absent a specific recommendation, strikes me as a misdirection play that does nothing to expose the real dynamics of this issue: that I Star is trying to blackmail the City in a zero sum game in which it is either their way or nothing. It utterly misses the point by not exploring the potential of that property or the options the developer has for achieving their profit without taking out a profit insurance policy on the taxpayers dime.
I support the development of the Superblock. However, as a 31 year resident who has been looking forward to the day that real estate values reflect the amazing quality of life that we have here in Long Beach thereby allowing development to drive increasing tax revenues and some degree of tax relief for overburdened taxpayers, I ask my fellow residents to show up on Wednesday to bear witness, to let the IDA know what we know.