Friday, December 26, 2008

WNYC's Schuerman on AY timetable oversight: "the deadlines are pretty generous"

On Wednesday, December 24, WNYC radio's economic development reporter, Matthew Schuerman, was interviewed about Atlantic Yards at approximately 25:45 of Hour 2 of Morning Edition. While there wasn't much new for Atlantic Yards watchers, it was a decent summary of the issues and a reminder of the developer's over-optimistic plans, the government's limited leverage, and the question mark over the project's future.

The segment began with a quote from developer Bruce Ratner, who's rarely available to the media but appeared on WNYC's Brian Lehrer show in December 2003: "It will us take a year to go through the different processes and plans for the arena. And in about three to three and a half years, I hope to have an arena up and the start of some residential development."

That not-so-credible Arena 2006 plan has been pushed back again and again; when the project was approved in December 2006, the opening date was projected to be 2009, but now it's 2011 (and I think that's doubtful).

Delays and work

The narrator said that developer Forest City Ratner "has said publicly it has done all it can do until two lawsuits... get resolved." While that's an accurate report of FCR's statements, it ignores the countervailing evidence.

Interviewed by Richard Hake, Schuerman said that FCR was "tearing down buildings on the terra firma portion of the project... where the housing was supposed to be built, 6400 apartments, a third affordable, a dozen or more high-rises, mid-rises, low-rises."

Just to be precise, the western segment of the project, the arena block would also support the arena, not just housing, and the 16 towers all would be high-rise, at a minimum of 184 feet and now a maximum of 511 feet. (It's the UNITY plan that proposes towers of more varying heights.)

Schuerman also mentioned that the upfront investment in the arena would be $200 million; I'm not sure whether he meant the government investment--which is accurate, regarding the arena block--or some other figure.

Litigation and timetable

Hake asked how easy it would be for the developer to restart the project even if they win the pending lawsuits. (The defendant is actually the Empire State Development Corporation.) I think that the eminent domain case is a longshot for the plaintiffs, given the rules in New York State; while the case regarding the environmental review is somewhat more up in the air, I've said that the state and the developer have to be considered favorites to prevail.

Schuerman noted that, if they win, FCR said they will have to evaluate the bond market again. He cited an interview with Assemblyman Hakeem Jeffries, who along with other elected officials attended a meeting Monday with FCR and ESDC.

Jeffries told Schuerman that Forest City didn't make any promises about groundbreaking but aimed for some time in the fall, which meant, Schuerman said, "they'd be able to construct the arena in time to open it for 2011-2012 basketball season."

He added one caveat: "that's assuming the economy would be good enough."

I'll add another: while Nets CEO Brett Yormark and others have said the arena could be built in 24 months, the official construction schedule says 32 months and Bruce Ratner has said 30 months. In other words, the best-case scenario is likely 2012--unless a speed-up in construction work is possible.

Government leverage

Hake asked what the government was doing to make sure the project doesn't collapse.

Schuerman suggested that the city and state had some leverage in terms of delivering pledged funds.

He added: "There are some ways where they can get some of that money back if Forest City Ratner doesn't meet deadlines, but I gotta tell you, the deadlines are pretty generous. I think the arena has to built within six years of the settlement of litigation, for example, and in the entire project, there isn't really a deadline Forest City has to meet. So for the most part, the city and the state are just crossing their fingers, waiting to see. It's a little too early to say that this project is doomed, exactly, and there's hope that the economy will turn around quickly."
(Emphasis added)

The generous deadlines and limited penalties imposed by the State Funding Agreement and City Funding Agreement, signed in September 2007--nine months after a ten-year buildout was anticipated in the project approval, and well before the market crash--deserve a lot more attention.

Schadenfreude?

Hake asked if AY opponents are jumping for joy.

Schuerman responded: "I'm sure there's some schadenfreude there, to see Forest City Ratner on the rocks like this, struggling to get this project under way, really. But they live here--it's a devastated neighborhood, it's even more devastated now that half, three-quarters of the buildings are cleared away, and they're really worried that Forest City Ratner will sit on this land, not doing anything for five, ten years, and their neighborhood will just get worse and worse."

I think that, while perhaps half of the buildings have been demolished, many larger buildings remain, so less than half of the non-railyard site has been cleared.

People in and bordering the footprint are living near empty lots--blight as defined by the state. Most of the opponents live outside the footprint and have a more peripheral relationship to the site--forced by the closure of the Carlton Avenue bridge to detour, or to pass some eyesores--but an ongoing relationship to the policy response, or lack thereof.

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