Atlantic Yards Project

Accounting News Roundup: SEC at “Bottom of the Barrel” When it Comes to Diversity; More on Competition (or Lack Thereof) in the Audit Market; Define “Rich” | 10.01.10

SEC Plans to Hire More Women and Minorities Amidst Poor Rankings [FINS]
“At a recent panel discussion and networking event at the agency, Commissioner Luis Aguilar spoke about the need to hire ‘the best and brightest,’ while acknowledging that in the past it hasn’t done a good job of recruiting women and minorities.

In his speech, Aguilar said that as of FY 2009, 89% of the SEC’s senior officers were white, 4% African-American, 3% Hispanic and 2% Asian. Along gender lines, 67% of the officers were male and 33% were female.

Moreover, in a recent survey published by the Partnership for Public Service, the SEC fell from 11th to 24th place on a list of the ‘Best Places to Work’ rankings. With regard to diversity, the SEC ranked 24th out of 28 agencies when it came to diversity. In other words, the bottom of the barrel.”

PCAOB Fires Shot on Audit Issues, Calls for Enforcement [Compliance Week]
“The Public Company Accounting Oversight Board has published a report summarizing its observations after inspecting audits performed while credit market seized and the economy plunged into depression. The report says auditors generally didn’t adhere adequately to PCAOB standards when it came to some of the toughest areas in financial reporting through the credit crisis – namely fair value measurements, goodwill impairments, indefinite-lived intangible assets and other long-lived assets, allowances for loan losses, off-balance-sheet structures, revenue recognition, inventory and income taxes.”

Viacom Names New CFO [WSJ]
Controller James Barge succeeds Tom Dooley who jumped over to the COO seat.

Accounting niches [AccMan]
Are accountants doing enough to leverage their professional expertise?

Investors unhappy with lack of competition in audit market [Accountancy Age]
“The Association Of British Insurers (ABI), whose members account for almost 15 per cent of investments in the London stock market, is worried about the audit structure and said it has made its views known in a submission to a House of Lords inquiry into audit competition.”


H&R Block sees 5-cent hit from IRS policy change [AP]
Fewer rapid refunds doesn’t seem like a bad thing.

KPMG’s Fuzzy Math on Atlantic Yards [NYO]
The completion of the Atlantic Yards project remains on a timetable that runs parallel to the adoption of IFRS in the United States.

Tax the rich, whoever they are [Don’t Mess with Taxes]
Come out with your hands up!

Did KPMG Plagiarize Part of Its Atlantic Yards Market Study?

Back in the fall we told you about a market study that KPMG issued on the Atlantic Yards project.

At that time, we learned that KPMG had done some less-than stellar research on the movement of the units on Prospect Park and it got the attention of some the local blogs covering the massive development project.

Namely, the Atlantic Yards Report blog. It reported:

KPMG’s report has some very shoddy research. Consider that the report (dated August 31) claims that Richard Meier’s On Prospect Park is 75% sold. (Only rental buildings are pre-leased.)

However, the New York Times reported September 27:

While the developers say half of the building’s 99 units have been sold, the real estate Web site StreetEasy.com documents only 25 closings through public records.

AYR didn’t state it so boldly back in the fall but in a post from yesterday (as well as reports in May and June) it isn’t so nice and flat out calls the firm out for lying, “The KPMG report got very little discussion, but it contains lies–blatant, checkable lies–about condo sales.”

But wait! There’s more! We learned today from a friend of GC that not only does AYR call out KPMG for having their pants on fire, it also says that the firm got a little carried away with the copy and pasting:

I discovered when I took another look, it contains more than two pages of shameless borrowing–plagiarism that is not diminished by a vague footnote.

The entire section on New York City Market Dynamics is cribbed from The Corcoran Report(s) for Manhattan and Brooklyn for the second quarter of 2009.

Yes, there’s a footnote to the section headline that cites “The Corcoran Report–2nd Quarter 2009” as a source (click to enlarge), but there’s no indication that nearly all the text–with the slightest of changes–comes from Corcoran.

No quotation marks, no indentations, no italics.

AYR provides several examples that are oddly the same identical. We’ve presented a clip from KPMG’s report here:

And here’s Corcoran’s (apologies for the small type):

Like we said, this is just one example. Our messages (email, voicemail, in a bottle) to KPMG have not been returned at this time.

KPMG’s Report on the Atlantic Yards Project Didn’t Impress Some People

Thumbnail image for bklyn.jpgWe might be going out on a limb here but it seems like a lot of studies that the large accounting firms put out don’t get much attention. There might be a press release and a mention here and there but otherwise not too much excitement.

That being said, KPMG must be thrilled that the Atlantic Yards Report is taking such exception with thlantic Yards Project:

KPMG’s Atlantic Yards market study, conducted on request of the Empire State Development Corporation (ESDC), backs up the assertion that Atlantic Yards might be completed in the announced ten years, rather than, as then-ESDC CEO Marisa Lago said in April, “decades.”

Well, not only are projections about condo values questionable, as I wrote earlier today, but KPMG’s report has some very shoddy research. Consider that the report (dated August 31) claims that Richard Meier’s On Prospect Park is 75% sold. (Only rental buildings are pre-leased.)

However, the New York Times reported September 27:

While the developers say half of the building’s 99 units have been sold, the real estate Web site StreetEasy.com documents only 25 closings through public records.

KPMG claims that the Oro Condos are also 75% sold. But just this week Crain’s reported that prices at Oro had been slashed 25%.

If you’re not familiar with the Atlantic Yards Project, you’re lucky. Let’s put it this way, it’s a $5 billion project that involves moving the New Jersey Nets to Brooklyn courtesy of Nets owner Bruce Ratner and sixteen new high-rise buildings and will be finished long after we get global accounting convergence.

So yeah, a developer’s paradise. Problem is that all the hype has transformed into a giant argument that pretty much involves everyone. As NoLandGrab points out, “if the Atlantic Yards project is so great, why does everyone pushing the project forward, and every alleged ‘study’ extolling its virtues, have to stray so far from the truth to make it appear viable?”

The obvious benefit we foresee is that the project may get rid of the worst Target on Earth but we may lack vision.

As for the Radio Station, they probably had the best of intentions when preparing their report but now, for better or worse, KPMG, who has yet to respond to our request for comment, is near the center of the rage. Enjoy.

What was KPMG smoking? Report claims 75% of Meier’s On Prospect Park has been sold; other statistics are way off [Atlantic Yards Project via NoLandGrab]
KPMG Atlantic Yards Market Study.pdf

UPDATE – July 13, 2010: Hey gang – a bit of belated correction/clarification here. Norman Oder, who writes the Atlantic Yards Report got in touch with us about our little quip about Target. He wrote to us “I know you’re trying to be entertaining, but that’s not close to true. The Target is across the road from the project site.”

So I guess our wishing out loud for the big Brooklyn bullseye to be destroyed won’t be happening (it’s not part of the plans at least) but we stand by our assertion that the Target is a hellhole and needs to be destroyed.