Wednesday, September 20, 2006

FCR's past plans for the railyard (and Nets), and future opportunities

So it turns out that Forest City Ratner had been looking at the Metropolitan Transportation Authority's Vanderbilt Yard for quite a while. During a taping yesterday of Reporter Roundtable, the public affairs show on BCAT/Brooklyn Community Access Television, Dennis Holt, senior editor of the Brooklyn Daily Eagle, told an interesting story.

Holt, whom Brooklyn Papers editor Gersh Kuntzman described as the "dean" of Brooklyn reporters, recalled attending the groundbreaking for Forest City Ratner's Atlantic Center mall in the early 1990s. (The mall opened in 1996.) Within the press packet was an aerial photo of the development site, just north of Atlantic Avenue and part of the Atlantic Terminal Urban Renewal Area (ATURA).

Superimposed on the photo, Holt recalled, was an arrow pointing to the MTA's railyard just to the south, between Atlantic Avenue and Pacific Street, with the statement, "Potential office building site."

A decade later, Forest City Ratner was thinking beyond just office buildings, leveraging an arena to gain public and political support for the biggest project in the history of Brooklyn. And, given that the arena couldn't fit over the railyard itself, the Atlantic Yards outline goes beyond the bounds of ATURA.

Within ATURA, an official urban renewal area, it would be easy to use eminent domain. But when the project outline extended all the way south to residential Dean Street, that made the politics of the deal more complicated. The city allowed the Empire State Development Corporation (ESDC) to review and approve the plan, and the ESDC can override city zoning and exercise eminent domain.

(In the map above, anything in red--including a grayish red, but not the gray alone--is within ATURA. The blue-and-red striped area between Atlantic Avenue and Pacific Street includes the Vanderbilt Yard and is within both ATURA and the Atlantic Yards footprint. The blocks in solid blue, which continue down to Dean Street, are within the Atlantic Yards footprint but not ATURA.)

The Brooklyn Nets, first pass

And FCR actually had toyed with a Nets plan more than a decade ago, according to Shirley Morillo's recent Columbia University master's thesis, titled "Historic Preservation and the Changing Face of Large-scale Redevelopment Projects in New York City: An Analysis of the Brooklyn Atlantic Yards Project."

From Morillo's thesis:
In the early 1990s, in the midst of the Downtown Brooklyn planning and building cycle, the New Jersey Nets approached Forest City Ratner with a radical proposal – that he buy the team and build them a new arena on his project site. The developer initially dismissed the idea knowing that past stadium schemes had been attempted in the past and that they had failed.

The source: former Forest City Ratner executive Paul Travis. But the short passage raises a question. Was the developer concerned about unmitigatible environmental impacts like traffic? Or was the issue simply the politics of the deal?

What next?

Along with pursuing the Atlantic Yards plan, what else is on Forest City Ratner's agenda? There are hints that FCR is rebranding the adjacent Atlantic Center mall as part of the snazzier Atlantic Terminal complex.

And we know the developer retains 1.258 million square of development rights at the Atlantic Center site, enough to build three substantial towers. The presence of that opportunity must factor into FCR's Atlantic Yards plans. Based on the current configuration, according to an estimate in New York magazine, the developer might make a billion dollars.

Let's say there's community pressure to downsize the Atlantic Yards plan significantly. Forest City Ratner would undoubtedly protest and claim that its costs would increase, and a business has to make a profit. But until the developer opens its books, we don't know what downsizing it could afford. And whatever the Atlantic Yards bottom line, there's another opportunity across the street at the Atlantic Center site.

Beyond that, Forest City Ratner must be thinking ahead. Atlantic Yards wasn't invented in a day. So let's assume the developer is already planning and acquiring land for future projects in areas within the orbit of its past projects. There's still money to be made in Brooklyn.

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