Thursday, November 20, 2008

Who's in charge? Forest City says "we control the pace" of Atlantic Yards

The Empire State Development Corporation (ESDC) says the state is in charge of the Atlantic Yards timetable.

However, Forest City Enterprises (FCE), parent of Atlantic Yards developer Forest City Ratner, is telling the real estate industry that Atlantic Yards is among "Active Large Scale Projects Where We Control the Pace."

That message was within an FCE PowerPoint presentation for the 2008 NAREIT (National Association of Real Estate Investment Trusts) Annual Convention this week in San Diego. (The slides accompanied presentations made by FCE officials.)

Both the ESDC and FCE, of course, seem to be discounting the effect of pending litigation and the availability of credit and tax-exempt bonds on delay.

But the message from FCE, apparently, is that, given that the project has received government approvals, the developer is in the driver's seat.

Public/private partnership?

It seems to be a direct contradiction of an ESDC lawyer's assertions in court this June.

And it puts an interesting gloss on FCE's Chuck Ratner statement, after approval in 2006, that Atlantic Yards is a "public/private partnership."

After all, project opponents have long called AY a developer-driven project. Even a "mend-it-don't-end-it" critic like the Municipal Art Society's Kent Barwick said, after the project approval, “From the beginning, the project has been a public-private partnership in which the public has not been represented."

Dubious timetable

Remember, as I reported June 24, George Locker, attorney for 13 residents of two rental buiildings in the Atlantic Yards footprint, questioned the project timetable during a court hearing.

While the General Project Plan and other documents projected a ten-year project timeline, the State Funding Agreement offers no start date for Phase 1, and gives the developer 12 years from the delivery of property to complete that phase without penalty. As for Phase 2, which would contain 70% of the affordable housing and all the open space, there’s no timetable.

“The bulk of the Atlantic Yards project, as far as the operative contracts are concerned, does not exist,” Locker said. About eight months after the December 2006 approval, he contended, “the project essentially disappears.”

“Reasonable” efforts to proceed

In court, ESDC attorney Philip Karmel attempted to rebut those concerns. “The foundation stone is the funding agreement,” he said, adding that the claim that there is no deadline “is a complete and total mischaracterization.” Rather, the developer is required to use “commercially reasonable efforts” to move forward.

What does that mean?

“It means you have to try your hardest,” he said.

Translation needed

This week's news raises a question: In what language does "we control the pace" mean "try your hardest"?

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