Friday, December 05, 2008

Documents show FCR has missed three deadlines to construct temporary railyard (and that litigation was not a factor)

Both the Empire State Development Corporation and developer Forest City Ratner blame pending litigation for the work stoppage at the Metropolitan Transportation Authority's Vanderbilt Yard.

I've already cited sworn affidavits by FCR executives who promised that work would continue during litigation, claiming that the developer's "construction schedule has been carefully drawn... by commencing work now on vacant properties that are owned by FCRC, the MTA and the City...."

There's another reason not to believe the ESDC/FCR explanation. Construction schedules prepared by/for the developer regarding completion of a temporary railyard--Stage 1 of three at the Vanderbilt Yard--offer no indication that litigation would be a factor.

And, contrary to the claim by FCR spokesman Joe DePlasco that "we've gone about as far as we can go at this point with preliminary work," the temporary railyard is way behind schedule, having missed three deadlines.

In fact, a license for temporary yard work signed 2/14/07 states (right; click to enlarge) that, if construction of a permanent railyard does not begin within 24 months, the MTA has the option to ask Forest City Ratner "to fully restore the Present VD Yard Functions" and--apparently, though the language is murky--end the deal. There's no indication that the MTA would exercise such leverage, but the option would become available in some ten weeks, as the authority waits for the $100 million FCR has pledged to lease the railyard.

Deadlines missed

Initially, according to a Construction Schedule attached to the Atlantic Yards Final Environmental Impact Statement (excerpt at right; click to enlarge), the temporary yard was supposed to open 8/17/07. That was unrealistic, given that the work never could have commenced 11/1/06, since that was nearly two months before the project was officially approved.

But the delay is now nearly 16 months, not two months, and will just continue to grow.

For example, according to the Preliminary Draft Construction Schedule that is part of the 2/14/07 license agreement entered into by MTA and LIRR with FCR, the temporary yard was supposed to open 11/8/07, nearly three months late.

According to another document, Construction Schedule Stage One (right), dated 5/20/08, the Temporary Yard was supposed to open 10/24/08, more than 14 months late.

Both documents were obtained from the MTA via Freedom of Information Law requests.

Why the delay?

I asked for more specifics about the timetable, but I didn't get any answers. I asked before the stall at the railyard had become evident; litigation wasn't cited as an explanation for delays.

"There isn't a more updated document," MTA spokesman Jeremy Soffin told me November 21. "It's a complicated construction project, and some delays are not unusual. I don't have updated projections at this time."

In other words, though the construction schedule describes various elements of work under columns such as "Remaining Duration" and "% Completion," he was unable to offer more detail about how much was done nor when completion of Stage 1 was expected. Nor could he offer any projection about the ensuing two stages of LIRR work.

The 2/14/07 contract does suggest that clarifications should be made available. It states that Forest City Ratner "shall deliver to Licensors from time to time (which may be during the course of project meetings held weekly or at such other intervals as the Parties may from time to time deem appropriate) updates or modifications to the Construction Schedule."

One example

The Atlantic Yards Construction Update for the weeks beginning November 17, 2008 and November 24, 2008, the last construction update to describe work at the railyard, indicated, among other work:
Continue installing gabion wall, Block 1121.

However, according to the updated MTA schedule issued in May, the gabion wall (a retaining wall) was supposed to be finished by 7/30/08, more than four months ago.

And, as I noted, the construction update did not indicate that the work was completed, even though in other cases the construction updates make that distinction.

In other words, it's a safe bet that the installation is not finished--and that the delay has nothing to do with litigation.

Deal was supposed to close a year ago

A 9/4/07 New York Observer (NYO) article headlined Atlantic Yards: The Suspense Builds described delays:
The company has not closed on a $100 million deal to lease the 8-acre Long Island Rail Yard from the Metropolitan Transportation Authority, but has been working instead under a license agreement. (M.T.A. spokesman Jeremy Soffin said the deal should close at the end of this year or in the beginning of 2008.) While contractors have taken the first step to construct a temporary rail yard on the eastern end of the site—a precondition for work on the arena, where trains are currently stored—that work was supposed to be completed by the middle of August, according to the schedule from last year.

But the deal did not close in early 2008.

In an MTA webinar last April, executive director Elliot (Lee) Sander expressed concern about the whereabouts of the $100 million. He said the money was assigned to the 2005-09 capital program, and brought up Atlantic Yards without being asked.

His statement:
There was approximately a billion dollars associated with the sale of MTA real estate assets to support that program. There are some monies there that look like there may be challenges to proceed upon right now. There is money there--100 million dollars associated with the sale of Atlantic Yards, and I think many of you have read in the newspapers some of the difficulty Forest City is having with that development, so hopefully that will proceed, but we want to make sure that that happens—but we’re concerned about that.

There's no indication in available MTA documents that the authority is counting on getting the money by next year.

A flashback on credibility

The NYO article offered some choice quotes that, in hindsight, hint at the credibility of various parties.

FCR spokesman Joe DePlasco: "We anticipate opening the arena in time for the 09-10 season."

Empire State Development Corporation spokesman Errol Cockfield (who now reps Gov. David Paterson): "We’re working with Forest City Ratner to achieve the goal of opening the arena by the 2009 season."

NYO on AYR: "Journalist Norman Oder first reported on the affidavit in his blog, Atlantic Yards Report, last April, and has repeatedly questioned Forest City’s ability to complete all phases of the work by 2016."

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