Saturday, May 12, 2007

Again, Forest City promises no assurances on Atlantic Yards timing

For the third time, I'll point to the developer's doubt that Atlantic Yards would be built in the promised ten years.

As I've reported, Forest City Enterprises (FCE) VP Chuck Ratner, during a 3/6/07 conversation with investment analysts, predicted a 15-year project buildout . He also said, "We are terrible, and we’ve been a developer for 50 years, on these big multi-use, public private urban developments, to be able to predict when it will go from idea to reality."

Then Ratner recovered by claiming that he was referring to the project from conception to completion. In his official statement, he asserted, "The actual construction of Atlantic Yards will take 10 years, and, as we have announced, preliminary work on the site has begun."

More caution

However, the Forest City Enterprises annual report filed on Form 10-K with the Securities and Exchange Commission acknowledged "potential for increased costs and delays," citing several factors, including construction costs, the availability of financing, and litigation.

Now the glossy FCE annual report to shareholders (p. 7) offers further caution.

As the graphic shows, Atlantic Yards is categorized in the "initial development stage," one step behind projects under development, referred to as the "shadow pipeline."

The company states:
While we cannot make any assurances on the timing or delivery of these projects, our track record speaks to our ability to bring large, complex projects to fruition.
(Emphasis added)

As noted, the timeline matters, because it affects construction impacts and the delivery of promised benefits like affordable housing and open space.

In legal papers filed last month, FCE subsidiary Forest City Ratner contended that it's in the process of meeting a tight schedule. Investors, however, are warned not to mark their calendars in pen.

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