The Real Deal New York

Ratner fights Barclays $741 million tax appraisal

November 20, 2012 12:30PM

Bruce Ratner and Barclays Center

Developer Forest City Ratner is arguing in court that the city overvalued Barclays Center by more than $600 million, DNA Info reported. Late last month, the developer’s subsidiary, Brooklyn Events Center, went to Brooklyn state court to fight the city’s $741 million property tax appraisal of the music venue and home to the Nets basketball team.

Bruce Ratner is arguing that the venue is worth only $111 million. However, his motive for fighting the appraisal remains uncertain, since the developer has arranged with the city not to pay property taxes and the project was partially publicly funded.

The New York City Finance Department bases its valuation on potential income and then calculates taxes off that value. But the Independent Budget Office, the city’s fiscal watchdog, estimated in 2009 that Ratner received some $761 million in subsidies and tax breaks from the city and state to develop the 22-acre Atlantic Yards site.

Although Ratner will not have to pay property takes on Barclays, it does have to make payments in lieu of taxes to the city, which helps cover the debt service on the $511 million in tax-exempt bonds used to develop Atlantic Yards.

Nevertheless, the Barclays Center does appear on the city’s property assessment roll and is listed as owing taxes, so Ratner’s exact relationship with the city may not be fully understood, according to DNA Info. [DNA Info]Christopher Cameron

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