Friday, April 18, 2008

The six-year arena timetable surfaced in December 2006

I can't believe I and others missed it, but the news that Forest City Ratner has 6+ years to build the arena--six years after the end of litigation and delivery of the project site via eminent domain--wasn't exactly new.

It was on page 28 of the Modified General Project Plan (Part 2), issued and approved by the Empire State Development Corporation (ESDC) on 12/8/06. (Click to enlarge.) It was not, however, in the General Project Plan issued in July 2006, which got a lot more scrutiny.

However, the other parts of the timetable--that the developer has 12+ years to build Phase 1 and an unspecified time to build Phase 2--were, indeed, first revealed in the recently-surfaced AY State Funding Agreement.

Delays from the start

This much is clear: the ESDC, even while approving a plan "anticipated" to be completed in ten years, allowed for six years--including four years of delay resulting from force majeure events or significant financing snags--to build the arena.

So former FCR executive Jim Stuckey's affidavit filed on 4/27/07 in the environmental lawsuit, now on appeal, should be taken with a grain of salt. The petitioners had challenged the project's ten-year timetable, saying the state's environmental review lowballed the impacts of a much longer project.

Delays a "theory"?

Stuckey scoffed at the petitioners' argument, saying that they "primarily base their theory" on a statement made by Forest City Enterprises CEO Chuck Ratner, who told investment analysts the project would take 15 years to build and assented to a statement that the arena would open in 2010.

Stuckey pointed out that Ratner two days later clarified his statement, insisting that the 15-year timetable referred to the elapsed time between project conception and project completion, and that the developer was "committed" (a word with built-in flexibility) to opening the arena in time for the 2009-10 basketball season.

I found Ratner's clarification not so credible. A year later, that timetable is in tatters. Forest City Ratner must be thankful it negotiated some slack.

As the case challenging the environmental review is on appeal, it'll be interesting to see if the ESDC is challenged on harmonizing its prediction of a ten-year buildout for 17 buildings with the slack it granted the arena (and, by implication, the rest of the project). It may be legal. But it certainly wasn't very transparent.

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