New York Times op-ed columnist Nicholas D. Kristof properly excoriates George W. Bush today (“Bush and the Texas Land Grab“) as a practitioner of “crony capitalism.” In the early ‘90s, Bush and his Texas Rangers business partners convinced local government to help them acquire land at a steep discount and to subsidize the actual construction of their new ballpark. Kristof writes:
Essentially, Mr. Bush and the owners’ group he led bullied and misled the city into raising taxes to build a $200 million stadium that in effect would be handed over to the Rangers. As part of the deal, the city would even confiscate land from private owners so that the Rangers owners could engage in real estate speculation.”It was a $200 million transfer to Bush and Rangers owners,” complains Jim Runzheimer, an anti-tax campaigner in Arlington.
Elsewhere on the same page, Paul Krugman similarly chronicles the Bush and Rangers shakedown of local government in “Steps to Wealth.”
Kristof and Krugman, I must say, have Bush dead to rights. And I can only hope that the columnists will continue their muckraking by publicizing a similar case of crony capitalism being practiced in New York City by Arthur Sulzberger Jr.’s New York Times Co., which publishes the Times, and its real estate partner Forest City Ratner Companies. Together the two companies hope to consummate a similarly controversial land and development deal at 40th Street and Eighth Avenue in New York City to build the media company’s new headquarters.
In a Dec. 14, 2001, New York Times news story, reporter David W. Dunlap wrote:
The project will benefit from $26.1 million of government incentives: sales-tax exemptions on the equipment and materials used in the new building, a waiver of the mortgage-recording tax and a discount on electricity rates.Though the developers [the Times Co. and Forest City Ratner] will pay acquisition costs up front for the 200-by-400-foot site, they will ultimately be liable for only $85.56 million. The excess will be refunded over time as a credit against the rent they pay for the site, made as a payment in lieu of taxes, meaning that the city is likely to forgo millions in future revenue. [emphasis added]
According to an account of the deal in the June 17 Village Voice, “The Paper of Wreckage,” the Times Co. and its partner are availing themselves of the state’s power of condemnation to acquire the property at below-market rates, just as Bush and the Rangers did in Texas. W. Tod McGrath, a professor of real estate finance at the MIT Center for Real Estate, told the Voice that the deal would give the developers “at least a 25 percent discount” on the property.
If the Bush deal is, as Kristof wrote in his conclusion, “a sordid tale of cronyism, of misuse of power, of cozy backroom money-grubbing—a more pressing threat to American business than outright criminality,” then what is the Times Co. deal? Watch the Times op-ed page for the answer.