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Monday, April 8, 2013

Wall Street Journal Highlights Problems with Past ECB/DOE Projects

"The World-Wide project came a result of a complex public-private partnership. The site actually is owned by the city's Department of Education, which in 2006 agreed to lease it to World-Wide for 75 years. As part of the deal, World-Wide agreed to rebuild two aging schools now on the site: an elementary school and a 1,400-student high school. 
The agreement was billed by the city as an innovative way to pay for new schools, given that the proceeds from the lease—which the city in 2006 said would be worth $325 million—would more than cover the price tag for the school construction.
After the downturn hit, the tower plans were put on ice. But World-Wide went ahead with construction of the schools, which were built on the same property in a way that also left space to build the tower. The schools, which were paid for by the city, opened in the fall, and the developer also built adjacent retail space that now holds a Whole Foods."

This development raises the question of how the school was paid for when the developer postponed the building of the tower when they lost funding.  Did the city go out of pocket contrary to the so called advantage of this pubic/private development?

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