Tuesday, August 23, 2016

Why were buses idling for hours outside the Barclays Center this morning?

Buses presumably associated with the Barclays Center were idling on Sixth Avenue for hours, according to photos and video. (Note: there's no direct evidence regarding the buses, but it is not unusual for buses associated with the arena to idle nearby, and four days of wrestling events ended last night.)

A video posted by resident Wayne Bailey, shot after he returned from a run, indicates that two buses idled for more than 30 minutes on Sixth Avenue just below Pacific Street.



But the AY Cam trained on Sixth Avenue shows buses idling on Sixth Avenue above Pacific, starting at about 3:20 am, and lasting through about 4:05 am. It shows (the same?) buses idling again on Sixth below Pacific, starting at 4:20 am, and lasting through about 5:45 am.

When I know more, I'll update this. But I have to imagine that, when more people move in nearby, there will be many more complaints.







Yormark: Nets' move delayed by "some nuances in Brooklyn"; team hopes to return to China (EB-5?)

NetsDaily points to an interview in China with Nets/Barclays Center CEO Brett Yormark. I'll just point to a couple of things.

"The move [to Brooklyn] was somewhat delayed," Yormark says at about 3:28, "because of the economy and some nuances in Brooklyn." Yeah, right.



Though Yormark does say, of the 2015-16 season, "It candidly was a disappointing season," at about 4:15 he salutes Brooklyn as a "basketball market," and adds, "because we had six years to start seeding the brand, there was incredible anticipation for the arrival of the Brooklyn Nets, and we've been feeding off it ever since."

Except for last year, when gate count fell well under 12,000.

Now, the Nets have "ten-plus new players," he says, which is another reminder that fans are rooting for the clothes.

Return to China?

He talks about using Jeremy Lin to connect with a new fan base--they're branding "BrooklLin," as noted by Nets Daily--and leaves a hint.

At about 12:04, he says, "Hopefully, we'll return here in the fall of 2017 with the NBA to play here in China. Hopefully, we'll continue to fuel the excitement for our team here in China and be considered maybe behind Houston as the second home team of the fans here in China."

If the Nets return, would that be coupled with another effort to recruit immigrant investors to provide cheap financing in exchange for green cards under the sketchy EB-5 program?

After all, original developer (and owner of the arena operating company) Forest City Ratner went to China three times, the latter two in partnership with the Greenland Group, its new joint venture partner/overseer, each time coupled with Nets visits.

My first thought was no. After all, Forest City and Greenland are no longer connected to the arena, so the owner of the team and the arena operating company, Mikhail Prokhorov's Onexim, wouldn't have that connection to the Chinese market.

But Atlantic Yards is a "never say never" project." I wouldn't be surprised if they found a way to make that connection. After all, Prokhorov just refinanced the Barclays Center debt to save money

Why wouldn't he want to save money--or split a project with Greenland Forest City Partners to save money jointly?

Basketball is huge in China. It can obscure many ambiguities.

AY down the memory hole: Vanderbilt Yard improvements portrayed with no mention of shrunken railyard, bargain on development rights, and source of funds


Again, Atlantic Yards down the memory hole, with the sunny side of a revised deal gaining notice, while the developer's savings are ignored.

Yesterday amNY published As part of 'West Portal' LIRR project at Vanderbilt Yard in Brooklyn, crews cut through 100-year-old rail tunnel:
Construction crews have punched through a 100-year-old rail tunnel in the LIRR’s Vanderbilt Yard as part of ongoing work to modernize the Brooklyn storage facility.
Underneath congested Downtown Brooklyn streets, the 4-foot-thick concrete wall of the tunnel was blasted open this summer to build a direct train path between the yard and Atlantic Terminal for the first time.
The connection will be known as the “West Portal,” one of several operational enhancements that Greenland Forest City Partners, a joint venture between developers Greenland and Forest City Ratner, are delivering to the yard as part of a real estate deal to build part of its $5 billion Pacific Park project above the facility.
Here's the key section:
That process blocks other trains from using the tunnel for six to eight minutes at a time, which adds up to about two hours of wait time each day, according to the MTA.
The upgrade was a condition in the MTA’s deal to sell the air rights to the developers for Pacific Park, the 22-acre, mixed-use commercial and residential space formerly called “Atlantic Yards” that, after several delays, will be built over the next decade.
Along with the portal, crews will install electric signals to replace manual counterparts. Sewer connections will be built out from one to all nine of the yards’ tracks. The enhancements will also give MTA staff more space to navigate train cars.
(Emphasis added)

An MTA spokeswoman says that improved service will "sift down to benefit the customers."

No doubt.

What's missing

I bet this article was pitched by the public relations firm representing the developer. 

Here's what's missing: the lowered cost of the railyard, the bargain on development rights, and the source of the money for the railyard. 

As I wrote last November, keep in mind that the 2005 deal to build a modernized replacement Vanderbilt Yard to store and service Long Island Rail Road trains was revised, at Forest City Ratner's request, in 2009, and accepted by the Metropolitan Transportation Authority.

The permanent railyard, instead of having nine tracks with capacity for 76 cars, will have seven tracks with capacity for 56 cars. While there would be several improvements, the new railyard would be valued at $147 million, while the MTA's Gary Dellaverson in 2009 said the previous iteration could be worth $250 million, after inflation.

Also, as I wrote last November, the sale of development rights nearby suggests the value of the Vanderbilt Yard development rights would be worth $948 million before subtracting the additional cost of the new railyard, deck, and transit entrance--plus the benefit to the affordable housing.

But Forest City in 2005 promised $100 million in cash, then renegotiated an extension in 2009, at a gentle interest rate. At the very least, the MTA should have asked for a piece of the potential upside when it had leverage in 2009.

Moreover,  as I reported 5/8/15, Forest City and Greenland raised $249 million in the second round of cheap EB-5 financing from immigrant investors, which can be be used to build that railyard. 
A September 2014 letter) from Empire State Development, the state agency overseeing/shepherding Atlantic Yards/Pacific Park, makes it clear:

Monday, August 22, 2016

About that public plaza? The Barclays Center leveraged "new landmark" to boost revenue "in the casino category"

Let's look carefully at this excerpt (below) from the Preliminary Official Statement for the successful refinancing of the Barclays Center bonds.

Regarding the arena's capacity to raise revenue from sponsorships, consultant from consultant Convention Sport & Leisure (CSL) stated," The Arena leveraged a new landmark (the plaza outside the main entrance) to generate a 51 percent increase in the casino category."

Well, then.


Amenity or advertising opportunity?

As I wrote 3/31/16, one justification from developer Greenland Forest City Partners for moving the bulk of the unbuilt B1 tower across Flatbush Avenue to Site 5, according to Forest City Ratner's Ashley Cotton was, "a key thing we think we can accomplish with this is keeping the plaza permanent open space."
But does it serve the public?
Click to enlarge and see Resorts World Casino NYC Plaza

Though bondholders should be happy about the casino connection, GFCP avoids the name. As I wrote, imagine if Cotton had said "keeping the Resorts World Casino NYC Plaza permanent open space."

It's not a park. It's a private amenity that has some benefit to the public.

But it's far more useful to the arena as a tool to leverage public approval. And, as we now know, it's part of a valuable partnership "in the casino category.

Sunday, August 21, 2016

In final part of video interview, Gilmartin says she and Ratner "finish each other's sentences"

OK, there's not much new in the third and final part of the BisnowTV interview with Forest City Ratner CEO MaryAnne Gilmartin (here are the first and second), but it does fill in a few blanks. I've interpolated a few comments (in italics).

Interviewer Kenneth Weissenberg, partner at EisnerAmper, remains fawning, if not super-prepared.

KW: You started in the city, the City Planning Commission, about 30 years ago? (C'mon, you don't know where she started?)

MAG: I started in economic development, it was close to 30 years ago, I won a fellowship called the Urban Fellows Program,.. I was on my way to law school... I ended up doing public development in the Public Development Corporation, which is now the Economic Development Corporation... and I realized then I had real estate in my veins. Then I realize 'Wow, I could do all this large-scale public private partnership work on the private side,' (for a lot more compensation, and with more power) and that's when I hooked up with Forest City and Bruce Ratner (so, no mention of former PDC boss Jim Stuckey, who earlier went to Forest City, and in 2007 left under a cloud?), and I've been there now 22 years.



The ride to the top

KW: You've risen to the top.... How's that ride been? (Tough question!)

MAG: I stand on the shoulders of giants. I am surrounded by the most talented people in the industry. So it begins and end with the people. (Except sometimes the people do disappear) When I became CEO, I realized I'm really Chief Talent Officer... But working so closely with Bruce Ratner and trying to fill those shoes was a very intimidating moment for me... But of course I knew it was time, and Bruce very badly wanted it to happen. I got a lot of support from the parent company... But people say it takes about 18 months to realize kind of what you've done. One of the things I did to keep my focus on the right stuff was to relocate my family from Scarsdale to Brooklyn.... Moving my family to Brooklyn has been the single best decision I made in this decade.

After that, it would be taking up the helm at Forest City, because I've had such support from Bruce, he's still in the business, although not as active. He's there to be a chairman of the company, and a sounding board for me, on strategy. We do a very good job. We finish each other's sentences, but we approach the world from different places, so it's a great partnership. (Didn't you disagree about whether Frank Gehry should design all of Atlantic Yards?) Again, the people--it really is about the people. (There's been a lot of turnover, as the Real Deal reported.) Development is a place where a lot of really smart people want to be. The business has changed...There's some amazing talent drawn to the work of placemaking. (Is that all they do? What about wrangling governmental assistance?) At Forest City, we are prolific. (Less prolific now: Where are the new development projects?) We have our pick of extraordinary talent. So we've been able to put a lot of amazing collaborative teams together, and that's really what makes me look good, because they are best in class.

Women = diversity

KW: Forest City seems to be unique among some of the real estate firms in New York, which are old boy's clubs, so to speak. There's a lot of diversity (in terms of gender)--has that always been the philosophy that Bruce has brought to the table?

MAG: The best way to prove that diversity is important, because you represent a diverse city, is to have that as part of the DNA of the company. (Let's see a chart of the top officials.) Bruce Ratner runs a meritocracy. So I grew up in a meritocracy, where best man or woman got the job. Because I was able to rise, and younger professionals were able to see that, I think it was somewhat somewhat inspirational for other women in the company to see. You could be married, you could be a mother, and have children, and still rise to a level in a company where you're at the very top making decisions (sometimes, it's been said, cutthroat ones)....Again, we hire on the merits. Women are by the very nature are very good at this business, because it's highly collaborative and it requires doing lots of things and synthesizing.

KW: You have to be creative.

MAG: You have to be creative. I think these are skill sets, it's not that men don't have them, it's that these are skill sets that a lot of women have and are very good at. (But real estate development in New York is about wrangling with government too.) About 65% of our professionals in the development space are women. I do think that's a way to change the industry, because, still, in the development world, it's far too uncommon to find women at the tables where I sit, and certainly at the board level. I also have the good fortune of being on the board of a public company, Jefferies (an investment bank with exactly one female director). That was a great opportunity for me to break into a space where there's a lot of room for improvement on the diversity front... Jeffries, to their credit, saw that.... I've been on my fourth year as a board member, and I enjoy it a lot.

KW: I see it as trend in corporate America to try to bring diversity to their boards, it's a refreshing change. Diversity adds differences of opinion. (Which is why board meetings of parent Forest City Realty Trust, formerly Forest City Enterprises, often sound like family reunions, and activist investors are trying to end the two-class stock structure?)

MAG: Nobody should hire someone that's not qualified or ask a board member to be on a board that's not qualified. I know the company that I run in. I know there are a lot of really capable, really smart women in business in New York... companies can make a change.

Former Nets GM Thorn: Kidd thought Ratner "didn't care about winning," NBA ownership has changed



Well, he's not nearly as bitter as former New Jersey Nets forward Kenyon Martin, but longtime General Manager Rod Thorn has a similar verdict on the ownership of Bruce Ratner, as described in a recent interview with Yahoo columnist Adrian Wojnarowski's Vertical Podcast with Woj: Rod Thorn (h/t NetsDaily).

At about 58 minutes into the podcast, Thorn describes how Kidd claimed a migraine and asked for a trade, as  he "felt that when ownership let Kenyon Martin go... that ownership didn't care about winning."

Thorn didn't agree with Kidd's tactics, but agreed that Kidd made "a lot of us, including me" far more successful than they would have been.

The new ownership

After Mikhail Prokhorov took over ownership in 2010, Thorn could have stayed. He had "no negative thoughts" about Prokhorov or his deputy Dmitry Razumov, with whom he primarily dealt, and the asked for him to stay.

But Thorn thought he'd been there long enough, more than a decade, "through some really, really good times," and needed a fresh start.

 Wojnarowski tried to probe, suggesting that the "business side," notably team/arena CEO Brett Yormark, "had influence," seeking stars, and "that kind of shortcut was never going to work... I'm not sure you wanted to run a team that way... if basketball wasn't steering the ship."

"Well," responded Thorn, "teams have changed. Ownership has changed. Virtually everybody that owns a team now today is a billionaire. There's no more mom and pop. There's no more what we had in the ABA [American Basketball Association] where we were trying to make it every day and what you had at various times in the NBA where we're all in it together.  Now, it's 'we got to do this or else' basically. But it was me."

That's reasonable, just as it's not unlikely that Thorn had his doubts about the new ownership and their assemblage of a not-quite-stellar, bound-for-Brooklyn team anchored by guards Deron Williams and Joe Johnson, and even more so the trade--a sacrifice--to bring aging Boston Celtic Kevin Garnett and Paul Pierce.

Saturday, August 20, 2016

Brooklyn's boom tempering?

So, when even an industry cheerleader says it, maybe Brooklyn's boom is tailing off. Bisnow reported on a panel, with the headline BROOKLYN DEVELOPERS, FINANCERS ARE GROWING MORE GROUNDED IN THEIR EXPECTATIONS:
Sitting in the newly completed William Vale Hotel, the panelists of Bisnow’s Brooklyn New Frontiers event warned that the increasing difficulty of construction financing and a frustrating government could bring the borough back to earth, but insisted there are still opportunities and areas to take advantage of in the time we have left/

Water connection work today at Pacific between Carlton/Sixth; Monday at Flatbush and Dean (lane closure)

A message below, verbatim, from Pacific Park Brooklyn and Empire State Development about water connection work in two locations.

Note that the Pacific Street work was supposed to start ten days ago and involve noise.

The work at Flatbush and Dean was hinted at in the most recent Construction Update, but there was no mention of a lane closure: "Overnight and daytime water service work at the intersection of Flatbush & Dean Street may occur."

---
Pacific Street between Carlton & 6th Avenues
Saturday, August 20th, 2016

On Saturday, August 20th as part of the Pacific Park Brooklyn development there will be water connection work on Pacific Street between Carlton & 6th Avenues from 7:00AM - 3:30PM.

During this work the sidewalk on the south side of Pacific Street will remain open to pedestrians.

This work will not require any disruption of water service to residents.


461 Dean Street
Flatbush Avenue at the corner of Dean Street
Monday, August 22, 2016

On Monday, August 22nd as part of the Pacific Park Brooklyn development 461 Dean Street water connection work will require the partial closure of one travel lane on Flatbush Avenue at the corner of Dean Street; the street is expected to remain open to vehicles.

This work is expected to occur during the day time hours, as stipulated by DOT permits.

During this work the pathways will remain open to pedestrians.

This work will not require any disruption of water service to residents along Dean Street or within Barclays Center.

Just another wrestling load-in for the Barclays Center yesterday









Friday, August 19, 2016

Curbed's "A decade on, Brooklyn’s Pacific Park megaproject is finally realized" (my responses + the Gehry switch)

Wondering what my response to the Curbed article, A decade on, Brooklyn’s Pacific Park megaproject is finally realized?

Well, see my Tweetstorm here. And read on.

First, the headline is just a wee bit conclusory. Getting ready to open a couple of buildings does not mean "finally realized." The non-park won't be finished until 2025, at the earliest.

More importantly, the framing of the article is (of course) tilted to the developer, and to a story about architecture, with no effort to ask the neighbors whether they agree the the layout "seems purposeful" or whether buildings fit into the neighborhood. Hint: they don't.

Heck, even I didn't notice on first read that Curbed treats Forest City CEO MaryAnne Gilmartin as steering the development, while she's merely the local front for Greenland Forest City Partners, and a Shanghai-based developer is the final authority.

Credit Curbed with making at least an effort to reach out--I get quoted a couple of times, including "It's hard to look at any piece of the project and ignore the overall taint or the ongoing question marks."

But Curbed didn't look into such kinda crucial things as the affordability of the "affordable housing" or the timing and sufficiency of the open space (which the developer keeps calling a "park").

Curbed's Amy Plitt does take cordial aim at Gilmartin's claim that "we're building a neighborhood," observing that marketing materials have "somewhat groan-inducingly" termed the megaproject "Brooklyn's newest neighborhood."

The Gehry switch

Perhaps the most astonishing paragraph is this, an example of what I call "Atlantic Yards down the memory hole:"
Atlantic Yards was originally planned as a Frank Gehry joint, with the starchitect laying out an expansive master plan for the site and designing the buildings that would rise there, including a preliminary version of the Barclays Center and the 62-story skyscraper dubbed, inexplicably, "Miss Brooklyn". But Gehry’s plan was waylaid by the 2008 recession, and in the aftermath, new architects—SHoP, COOKFOX, Marvel Architects, and Kohn Pederson Fox to date—were brought on to execute the vision for the site. "I certainly don't think I ever believed or supported the notion that Frank Gehry would be the architect of all of the buildings," notes Gilmartin. "It seemed almost antithetical to what a great diverse city and borough Brooklyn is. The diversity of the architecture, the different vocabulary of the buildings was also part of what we were striving for."
Hmmm. Well, Gilmartin certainly didn't make that public at the time. Was she somehow a Forest City Ratner dissident actively protesting her company's unwise policy? Doubtful.

Or has she seen the revisionist light, just as she's claimed that "Atlantic Yards was always a working title"?

Remember, Gehry himself said "Normally I would’ve brought in five other architects, but one of the requirements of this client is that I do it" and that "the client insisted that I do them all."

And, as Matthew Schuerman reported in the 2/26/07 New York Observer, when Laurie Olin, then the project's landscape architect, asserted that various architects "will probably be brought in," Forest City's project point man, Jim Stuckey, denied it: "Frank Gehry will be the architect on every one of them."

Olin also wisely predicted the project would take 20 years.
From the New York Observer

Another adjusted price tag for Atlantic Yards/Pacific Park: $6 billion?

As I wrote 4/5/15, though Atlantic Yards had long been described as a $4.9 billion project, rounded up to $5 billion (after starting in 2003 at $2.5 billion), a 9/16/14 press release issued by Greenland Holding Group, the new project's new 70% majority owner (excluding the arena and B2 modular tower) described a total project investment of $6.6 billion.

It's unclear whether that number included the arena, which cost about $1 billion, including infrastructure. But it's safe to say it's all a moving target, especially since costs surely will escalate during the buildout, which will last until (at least) 2025.

Now comes an 8/18/16 press release from Greenland USA about the company's third U.S. investment, Greenland USA Acquires 42-Acre Property in South San Francisco's Oyster Point, which includes the following paragraph:
The Landing at Oyster Point follows Greenland USA's $1B+ investment in Los Angeles' Metropolis and $6B+ investment in New York's Pacific Park Brooklyn. Both projects exemplify Greenland USA's expertise and vision for developing transformative properties in gateway cities that also support the local economy and foster the growth of the surrounding communities.
This syntax implies that Greenland would invest $6 billion-plus, which, if taken literally, means Forest City Enterprises would contribute another $2.5 billion-plus. Highly unlikely. And, of course, neither wants to use their own money, and are trying to sell three building sites.

But it's likely safe to say the entire project's price tag will ultimately exceed $6 billion--easily, if the arena's included, and likely, even without.

Thursday, August 18, 2016

In key preliminary ruling, judge rejects some Skanska arguments in dispute with FCR over modular factory

B2 from Flatbush Avenue
Forest City Ratner has won what seems a significant preliminary victory in one legal battle over its ill-fated partnership with Skanska USA to build the world's tallest modular tower.

The decision does not resolve any of the three pending cases, but does show a judge rejecting some Skanska arguments.

Among them: the claims that Forest City had promised to build the first three Atlantic Yards towers using modular techniques and that the Opportunity Brief, a business proposal from Forest City, made binding promises.

That judge, state Supreme Court Justice Saliann Scarpulla, is hearing all the cases, which face a 10/19/16 hearing.

Both Forest City and Skanska, when queried, declined comment.

For the 461 Dean Street tower flanking the Barclays Center, aka B2, Skanska USA agreed to fabricate, deliver, and erect the modules, and perform construction management services.

Skanska USA then hired FC+Skanska Modular (now FC Modular) to supply modules at fixed price of $31.4 million. Skanska Modular served as manager of the company, based at the Brooklyn Navy Yard. The goal: a revolutionary example of high-rise, modular construction.

Bitter dispute

Forest City had publicly said it aimed to build the entire project via this purportedly cost-saving technology, but B2, which broke ground in December 2012, took far longer than the two years announced. The new Greenland Forest City Partners joint venture, led by Shanghai-based Greenland Holdings, in 2014 decided to build the next towers conventionally.

In early September 2014, after Skanska closed down the factory at the Brooklyn Navy Yard, both Forest City and Skanska filed dueling lawsuits, blaming the other partner for causing delays and cost overruns. Indeed, 461 Dean will take nearly twice the time and cost far more than expected.

Skanska blamed a Forest City affiliate, the Atlantic Yards B2 Owner, for providing an inadequate design and an insufficient factory, among other things. It sought at least $50 million in damages. Forest City's affiliate blamed Skanska for breaching the parties' Construction Management and Fabrication Services Agreement (aka CM Agreement), causing delays and cost overruns.

Those cases remain pending, and the latest decision does not directly affect them, but Scarpulla's reasoning could have an impact.

Breach of contract

This latest decision regards a breach of contract suit filed in September 2014 by FCRC Modular against Skanska Modular, one-time partners in the factory. (Forest City bought out Skanska in November 2014 and later reopened the factory on its own to finish the tower.)

Forest City said Skanska Modular, led by President Richard Kennedy, unilaterally decided to shut down the factory, violating the parties' LLC Agreement. Forest City sought to have the factory reopened--which is now moot--and be awarded monetary damages and attorney's fees. Skanska said the B2 owner could have cured the various defaults on its side.

In response to Forest City's suit, Skanska Modular and Kennedy asserted 19 affirmative defenses, eight counter-claims and third-party claims. The judge agreed to dismiss all of the counter-claims--though perhaps left Skanska an opportunity to refile one of them.

But the judge dismissed only one of the affirmative defenses, which presumably sets up future battles in court.

The arguments, and the decision

For example, in its counter-claims, Skanska charged that Forest City failed to provide a sufficient capital contribution, factory, and labor pool, and provided defective and deficient intellectual property.

Justice Scarpulla agreed with Forest City that the LLC Agreement specified only that FCRC Modular was required to contribute the transfer of intellectual property, to negotiate a lease, and a collective bargaining agreement.

Skanska also asserts a breach of contract based on the Opportunity Brief Forest City circulated to prospective partners. But judge called the argument "meritless" because the brief was not a contract but a business proposal.

Skanska also charged that Forest City made false representations in the Opportunity Brief to induce it to enter into the LLC Agreement, including that there was a built-in pipeline of future towers, and that the modular design would be cost-effective. The LLC Agreement, the judge wrote, would rule.

Skanska alleged that Forest City repudiated its obligation by deciding that the modular company would not receive the contract to build two additional towers around the arena. The judge said that FCRC Modular was not bound by that pledge.

Additionally, the LLC agreement provided that such contracts would come only after completion and construction of B2, with certain leasing targets for it met, as well as financing targets for B3. So it seems Forest City would win on the merits.

In response to Forest City's request to recover $1.5 million paid to settle claims of furloughed workers, Skanska blamed Forest City for failing to negotiate a collective bargaining agreement that would permit the company to furlough workers. The judge agreement that the LLC Agreement contained no requirement for such a provision.

What's next?

Could Skanska open up its claims? The judge noted that "standard integration clauses" in the LLC Agreement and CM Agreement do not preclude Skanska Modular's reliance on representations outside of the agreement.

But she found that Skanska failed to state a claim against Forest City for fraudulent or negligent misrepresentation because such claims require more specificity. So I suspect that could leave open the possibility that Skanska re-files such claims.

Also, while Forest City moved to dismiss Skanska Modular and Kennedy's affirmative defenses, which blamed Forest City for negligence and the failure to mitigate production problems, the judge agreed that only one of those affirmative defenses was without merit.

So that suggests that, however many Skanska arguments were easily shut down, others will be further ventilated in court.

Going after third parties

Also, Skanska made some over-reaching claims that suggest the intensity of the dispute. Kennedy alleged that Forest City authorized publication of a press release that contained false and defamatory statements about him.

Forest City said the statement was a fair and true report of a judicial proceeding, and the judge agreed, noting that no facts backed the allegation that this was a malicious act.

Skanska and Kennedy also tried to get Forest City's p.r./lobbing firm Berlin Rosen and partner Greenland Holdings found in contempt, to produce documents, and pay attorney's fees.

The judge called the motion versus Greenland moot because she dismissed the counterclaims regarding alleged promises that the B3 and B4 towers would be built modularly. And she denied the motion against Berlin Rosen after denying the counter-claim regarding the press release.

FCR Skanska Modular Case Motion Decision 8/4/16 by AYReport on Scribd


Wednesday, August 17, 2016

Video: trucks block Dean Street outside Barclays Center loading dock

Honking. Traffic snags. A bus delay (forcing cars to the sidewalk to get around). A bicyclist on the sidewalk. A crosswalk compromised.

Three 18-wheel trucks making deliveries to the Barclays Center loading dock on Dean Street blocked traffic for some 20 minutes this morning shortly after 7 am, according to a video (below) posted by Wayne Bailey.

It's one of many neighborhood incursions from a not-so-smooth (but allegedly "seamless") loading dock operation.

Bloomberg: bond refinancing saves Prokhorov $90 million (but it's actually more); estimated income well below earlier projections

Yes, the bonds sold, and quickly.

As Bloomberg reported yesterday, Barclays Center Refinancing Saves $90 Million for Prokhorov:
Charles Mierswa, chief financial officer of the Nets and Barclays Center, said the amount is based on present value savings, or the current worth of a future steam of cash flows. Investors placed orders for almost 10 times the amount of bonds available, he said.
...The largest piece of the deal, $228.5 million of uninsured bonds with a 5 percent coupon maturing in 2042, was priced to yield 2.88 percent. The debt, which is callable in January 2027, yields 1.44 percentage point more than top-rated debt of the same maturity, according to data compiled by Bloomberg.
The bonds, which were issued by the Brooklyn Arena Local Development Corporation and are backed by payments in lieu of taxes, will refinance debt issued in 2009 at a top yield of 8 percent.
While the tax-exempt financing, enabled by the nominal state ownership of the arena, would save Prokhorov's Onexim Sports & Entertainment $90 million over the original bond payments his firm took over after buying Forest City Enterprises' 55% share of the arena last year, that's not all the savings.

Keep in mind that the original bond issuance would have saved perhaps $150 million over taxable bonds. (The city's Independent Budget Office estimated nearly $200 million in savings, but based on a larger bond issuance.)

The overall savings to arena operators are not purely additive, but there is some additional factor, including--but not limited to--the savings already achieved.

Expression of confidence?

“The overwhelming positive investor response to this bond offering demonstrates the market’s confidence in the leadership of Barclays Center and the operations of the venue,” Brett Yormark, chief executive of Brooklyn Sports & Entertainment, told Bloomberg.

Actually, the projected Net Operating Income this coming year of $46 million is well below the long predicted $70 million or $65 million by original developer Forest City Ratner/Forest City Enterprises, even the downgraded May 2015 estimate of $55 million.

In other words, the refinancing, which lowers annual debt service to $23.9 million in 2017 from an estimated $30.9 million (according to my reading of documents), is a huge help.

(The numbers are more complicated--for example, an analyst report estimates $6 million in annual savings--and there are other twists.)