Skip to main content

In Daily News Ratner asserts AY by 2018, ignores countervailing evidence

Without explaining where the financing would come from, including scarce affordable housing subsidies, Atlantic Yards developer Bruce Ratner today declares that the project would be complete in 2018, promising a 10-year timetable little different from that announced when the project was approved in 2006, albeit after a pause for delay.

Ratner, in a Daily News op-ed headlined Atlantic Yards dead? Dream on, does not mention the recently-revealed news that the State Funding Agreement gives him 6+ years to build the arena and 12+ years to build the five towers of Phase 1, both after the close of litigation and the delivery of property by eminent domain. Nor did he mention that the City Funding Agreement allows him to build a much smaller Phase 1 than that anticipated in the Empire State Development Corporation's (ESDC) General Project Plan.

Indeed, Ratner identifies Phase 1 as an office tower and three residential towers, leading to the conclusion that four rather than five towers would be built--despite a later assertion that "all" of Atlantic Yards would be built. So the project appears to be downsized a bit.

And, while asserting that the arena would open in 2010--a claim that even sports reporters have begun to discount--he doesn't address the fact that the three-year timetable to reconstruct the Carlton Avenue bridge and the Sixth Avenue bridge began this January. (Here's the construction schedule.) That means that, while it's possible that work could be sped up or that the arena could open with an adjacent bridge closed, it's not a good bet.

(Poster from rally yesterday.)

Nor does he address the acknowledgements by project supporters that the buildout could last decades. Just this week, Joe Chan of the Downtown Brooklyn Partnership told the Observer, "The Atlantic Yards was always a project that was conceived as taking a few economic cycles to fully realize itself."

Nor does he address the recent claim, by Chuck Ratner, an executive of parent Forest City Enterprises, that "we still need more" subsidies.

Coordinated effort

The announcement puts yesterday's counter-protest in greater perspective, as part of a coordinated effort to show support for the project.

The headline on the op-ed was a direct rebuke to the Brooklyn Paper's overblown Atlantic Yards Dead headline, published after Ratner, in a front-page 3/21/08 New York Times article, acknowledged that the project stalled and indicated that the arena was moving ahead, but said the economy “may hold up the office building... And the bond market may slow the pace of the residential buildings."

Daily News new favorite?

Today's op-ed was accompanied by a brief news story in the Daily News (p. 8), attributed to two reporters, headlined (online) Ratner vows to break ground on Atlantic Yards. The article, which included excerpts from the op-ed, contained no countervailing evidence nor any questions for Ratner.

Perhaps such a no-actual-reporting article was negotiated as part of the placement of an exclusive op-ed. Either way, it suggests that the Daily News, rather than the New York Times, has become Ratner's new outlet of choice.

Remember, Ratner chose the 7/5/05 Times for an exclusive look at new designs for the project, and the Times, on 9/5/06, was leaked and then overplayed the favorable-to-Ratner news that the project would be reduced 6% to 8%. Now, however, architectural critic Nicolai Ouroussoff, at least, has turned against the project, urging architect Frank Gehry to walk away.

Where's Frank?

Ratner does mention Gehry in today's op-ed, but only in the context of Miss Brooklyn, "Frank Gehry's signature commercial tower." Could that mean that Gehry may be working only on the arena and a small portion of the project, as Ratner has tried to lower our architectural expectations?

How much does it cost?

Also note that Ratner describes AY as a "multi-billion dollar" development, no longer attaching a $4 billion price tag. Given that the cost of the arena has already ballooned by 50%, adding more than $300 million to the tab, that might have been prudent. However, elected officials surely would like some more precision.

The op-ed

The op-ed begins:
In recent weeks, some have rushed to write the obituary of Atlantic Yards, the multi-billion dollar, 22-acre development my company is building near downtown Brooklyn.

But rumors of Atlantic Yards' demise, stirred by opponents, have been greatly exaggerated. The project is moving forward in its entirety, and in the coming years it will bring jobs, housing and an improved quality of life to Brooklyn.

We're still building all 6,400 units of housing - including 2,250 affordable units. We're still building the iconic Miss Brooklyn tower and the state-of-the-art Barclays Center, the future home of the Nets.

In fact, today, for the first time, I am offering an updated construction timetable for the project.

"Rigorous" review?

Ratner continues:
Yes, it's true that construction hasn't happened as fast as we would have liked. Why is this? First, a rigorous public review, conducted in conjunction with the city, state, MTA, local community boards, elected officials and local leaders, took a long time. But this process helped refine the project and ensure a better plan for Brooklyn.

Ratner's statement ignores the fact the project, shepherded by the ESDC, bypassed formal local input, and even project supporters like former Deputy Mayor for Economic Development Dan Doctoroff think, in retrospect, that it should've gone through the city's Uniform Land Use Review Procedure, or ULURP.

Court cases

Ratner continues:
We also had to overcome the hurdles presented in numerous court challenges. The opponents pledged early on to try to stop us cold in court, and they have thrown many obstacles our way. Fortunately, after 18 court decisions in our favor, they're now down to their last appeals.

Forest City Ratner has never defined what "18 court decisions means," since it certainly must include decisions on motions or parts of cases. If so, then the tally would have to include decisions--albeit non-dispositive ones--won by the developer's antagonist. (DDDB's response.)

Also, given the filing Wednesday of a new lawsuit, "their last appeals" is no longer accurate.

Financing available

Ratner continues:
Finally, the delays have pushed us into a time when the economy has slowed, and both financing and tenant commitments are more challenging to obtain. But contrary to rumors, large deals are still getting done, and in the past year alone we have closed on the two largest construction financings in our company's history, totaling over $1.3 billion. Atlantic Yards will be no different.

A key (but relatively small) component of that financing was tax-exempt Liberty Bonds, aimed to revive Lower Manhattan. Such bonds are obviously not available for this project.

Forest City Ratner has shown it can compete for scarce affordable housing financing, as shown in the development of 80 DeKalb Avenue. That doesn't mean, however, that it can get AY funded, and it's time for city officials to clarify what funding is, in fact, available.

Public sector partners

Ratner continues:
The stakes are high. As other major developments around the city face challenges, Atlantic Yards has become even more important to our economy than when we first announced it. That's why we have tried so hard to work through each obstacle we've confronted. If more unforeseen hurdles appear, we will tackle them with the same resolve. Working with our public sector partners, I am confident we will continue to overcome all obstacles to complete this project.

Does "working with our public sector partners" simply mean defense against lawsuits or does it mean a request for additional subsidies?


Ratner continues:
So, what's next?

Our first goal is to break ground on the Barclays Center later this year. Shortly after that, we will break ground on the first residential building, which includes a significant amount of affordable housing.

We plan to complete and open both of these buildings at the same time. Then we plan to break ground on the next residential tower in 2010, and then on the final residential tower of the project's first phase in 2011.

In these three residential buildings, no less than 30% of the approximately 1,500 units will be dedicated to low- and middle-income New Yorkers. We will then start the second phase of development, nearly a dozen additional residential buildings - including the balance of the 2,250 units of affordable housing.

Three residential buildings and an office tower in Phase 1? That suggests one building has been eliminated. Also, note that Phase 1 was supposed to have 2110 residential units, not 1500.

"We anticipate"

He continues:
We anticipate finishing all of Atlantic Yards by 2018.

Note the use of the weasel word "anticipate," rather than something more firm. Remember, Chuck Ratner told investment analysts last year, "As you know, in our business, these things take a very long time, most often, frankly, longer than we anticipate."

Miss Brooklyn

He continues:
As for Miss Brooklyn, Frank Gehry's signature commercial tower, a targeted marketing campaign to identify an anchor tenant is currently underway. When that tenant is confirmed, we will finalize plans and start building.

He doesn't respond to criticism that the developer is, according to the Times, essentially cold-calling potential tenants.

In closing

Ratner closes:
For many of you this may not be news - because we've been hard at work on the site for over a year. You've seen us at work and are perhaps already feeling the economic impact. We've awarded $42 million in contracts, 45% of which have gone to minority- and women-owned businesses. Working with our Community Benefits Agreement partners, we've started multiple work-force development initiatives to ensure the local community is a direct beneficiary of the project. This is what we promised and what we are delivering.

Of course, more than $42 million has already been delivered in public subsidies.

The final paragraphs:
The cynics can doubt. The critics can nay-say. Conspiracy theorists can spin wild tales. But Atlantic Yards is too important to the ongoing vitality of Brooklyn and New York for us to come up short.

We will build Atlantic Yards - and deliver on all of our commitments to Brooklyn.

If Ratner's so confident, he should hold a news conference and answer some of the hard questions.


Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…