Tuesday, December 29, 2009

How many jobs, really? ESDC quietly added nearly 4000 construction job-years between June and September

So, how many jobs would there be at the Atlantic Yards project?

The numbers are confusing, as the Empire State Development Corporation (ESDC) in September significantly changed its projection on construction jobs without explaining exactly why. And Forest City Ratner, in its most recent press release, has doubled the number of permanent jobs projected.

Construction jobs

For years, Forest City Ratner said there'd be 15,000 construction jobs, which actually meant 15,000 job-years, or 1500 jobs a year over a decade.

Of course, if the project takes longer than the promised decade--which, if it is built, seems a good bet--there'd be fewer jobs per year.

The ESDC, in its July 2006 General Project Plan, estimated 15,344 new direct job years and 26,803 total job years (direct, indirect and induced).

But the numbers have kept changing, and we don't have backing information. And if you read recent legal papers, it would be easy to get confused.

From the ESDC's MGPP

Here's the ESDC's June 2009 Modified General Project Plan (MGPP), also cited in an MTA affidavit in the recent case challenging the approval of the revised Vanderbilt Yard deal.

The same numbers--12,568 new direct job years and 21,796 total job years--were in the the December 2006 MGPP. In other words, the estimates weren't updated in more than two-and-a-half years. (Click on all graphics to enlarge.)


From the MTA

In recent legal papers, the MTA stated more generally that the ESDC estimated it would generate more than 10,000 new, direct job years and more than 20,000 in total.

From the ESDC

But the 9/17/09 ESDC board memo, distributed on the day the project was reapproved, stated that construction would generate more jobs: 16,427 new direct job years and 25,133 total job years (direct, indirect and induced):

Why did the numbers change? The ESDC stated:
The new projections result from changes in estimated Project revenues, a significant increase in the Project budget based on more current information, revisions to the ESDC model used to predict job creation and fiscal benefits (some of these changes reflect the impact of the economic recession, such as changes in wage rates) and additional information with respect to Project costs and subsidies.
Does that explain the increase of nearly 4000 construction job-years? Not exactly.

More importantly, in the 2006 analysis, the ESDC calculated not only total tax revenues (nearly $1.4 billion) over 30 years, in present value, but net tax revenues of $944.2 million "in excess of the public contribution to the project." In the 2009 analysis, the ESDC omitted a net tax revenue figure.

From FCR

In its response in the lawsuit challenging the ESDC approval, Forest City Ratner used those updated numbers--16,427 job years--as it did in its response in the lawsuit challenging the MTA deal.


FCR press release

Those numbers were distorted somewhat in Forest City Ratner's press release last week after the master closing. The developer stated:
Atlantic Yards will create close to 17,000 union construction jobs, as well as 8,000 permanent jobs once the project is complete.
While I initially thought the figure of 17,000 construction jobs was way off base, given the longstanding estimate of 12,568 job years, it's not as far off base. Still, it should be job years, not jobs. And 16,427 is not "close to 17,000;" rather, it's closer to 16,000.

Also, the claim of 8000 permanent jobs is bogus. Remember, the ESDC memo and FCR legal memo both claim 3998 jobs in New York City and 4277 jobs in New York State, inclusive of New York City. Whoever wrote the press release apparently added those two figures together.

ESDC stays fuzzy

In its legal answer in the suit challenging project approval, the ESDC steered clear of definitive numbers, claiming "thousands of construction jobs." Maybe the ESDC's lawyers know how fuzzy the numbers are.

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