Subsidizing the Times
October 19th, 2005
The editorial side of the paper may be reeling from the barrage of criticism over its handling of the Judith Miller case, but the real estate side of the Times seems to be faring quite well. According to today’s Observer, 10 of the 11 property owners whose holdings were condemned to make way for the new Times headquarters are suing, claiming they deserve far more compensation than the total $86 million they have received. But the Times has little reason for concern, writes Matthew Schuerman since, “according to the development agreement … , the Times Company and Forest City Ratner get to divert every dollar beyond that initial $86 million from the substitute tax payments that they’re making. In essence, city and state taxpayers — who are already chipping in several millions dollars’ worth of subsidies” will have to fork out even more if the disgruntled property owners win in court. Or, as Gawker puts it, “should these small-business Davids prove victorious against the development Goliaths, they’ll take their winnings from the city and state treasuries.”
By Gail Robinson on October 19, 2005, 11:44 amIn category: Land Use, Public Finance | 2 Comments »


October 20th, 2005 at 8:30 pm
I do not understand why we have to subsidize the Times from this short article? Can you please expatiate? And remember you are not writing for lawyers.
October 20th, 2005 at 10:09 pm
Maybe I sacrificed clarity for brevity.
I’m not a lawyer either, but according to the Village Voice, during the Giuliani administration, the city and state agreed to a hefty package to reward the company for constructing the new building near Times Square and keeping jobs in New York. The Voice estimated the package to total in the tens of millions, much of it in tax breaks.
And now there could be more. As spelled out in the Observer this week, it works like this: The state has condemned property around the site and decided the 11 owners were entitled to $86 million in compensation, which the building’s developer, Forest City Ratner, and the Times somehow paid. Now 10 of those 11 owners say the state undervalued the land — giving them perhaps as little as a fifth of what they deserved. The owners plan to go to court. But, according to the terms of the initial city-state-Times deal, the agreement set a limit on how much the land could cost the Times and Ratner. So, any money paid out to property owners above the initial $86 million could be deducted from the Times’ and Ratner’s tax payments. And since a tax break to a company is, for all intents and purposes, a subsidy, all New Yorkers — whether or not they read the paper of record — could end up subsidizing the paper.
Hope that makes a murky situation a bit clearer.