Thursday, November 06, 2008

Has Forest City laid off anyone working on AY? I'd bet yes

The Cleveland Plain Dealer reports that Forest City Enterprises (FCE), parent of Forest City Ratner, announced layoffs Wednesday, "citing tight credit conditions and dwindling demand from retail tenants for its projects."

Spokesman Jeff Linton wouldn't specify numbers, but said it was what the newspaper termed "a small percentage of the company's work force of 3,200."

Is AY included?

A brief paragraph, I think, provides some clues about Atlantic Yards:
He said the company remains committed to all projects already under way. "It's those far-future things that we've made the determinations that we need to slow down," he said.

You might say Atlantic Yards is "already under way," given that the developer and affiliates have already invested $250 million.

However, FCE categorizes Atlantic Yards in the "initial development stage," one step behind the "shadow pipeline."

Forest City Enterprises CEO Chuck Ratner said two weeks ago, "We have also demonstrated repeatedly in recent months that we continue to have access to non-recourse financing to fund our development pipeline projects."

In April, Ratner told investment analysts, "We’re looking at our entire development pipeline with a much more critical eye in response to realities of the current market. As a result, we’re moving forward only with the strongest projects and slowing or delaying others until those opportunities mature further or economic conditions stabilize."

Again, here he was talking about projects ahead of Atlantic Yards.

"Key project milestones"

In April, Joanne Minieri, president of Forest City Ratner, said of Atlantic Yards, "And upon the achievement of key project milestones, we will proceed as planned."

That, I wrote at the time, could mean the additional subsidies--at least $100 million--that the developer has requested, and at which strapped city and state government may not look favorable.

It also could mean the favorable renewal of the Barclays Center naming rights deal, the resolution of which we should know by the end of November. It also likely means the grandfathering in of tax-exempt bonds for the arena, which was achieved last month.

Why AY

But here's why I suspect Atlantic Yards is in the category of "those far-future things" cited by spokesman Linton. The developer can't have many people working on projects in the category that exists before the "initial development stage" category. So that latter category has to be a target for layoffs.

In March 2007, Chuck Ratner acknowledged regarding the shadow pipeline: "As you know, in our business, these things take a very long time, most often, frankly, longer than we anticipate." That statement obviously applies even more so to projects in the "initial development stage."

No comments:

Post a Comment