Skip to main content

As FCR scales back arena cost, Gehry's role recedes; ESDC, which once touted architect, says developer controls aesthetics

When it comes to Atlantic Yards, you must keep your eye on the ball. Remember, Forest City Enterprises CEO said last month that AY was one of the developer's few projects not on hold. Except it is--and Ratner said the market would determine the company's moves should lawsuits be cleared.

Yesterday, three newspapers reported that architect Frank Gehry was still on the project. However, his role seems to be receding, given that cash-strapped developer Forest City Ratner has brought in what a Daily News source called "value engineering" companies to scale back the cost (but not the footprint) of the arena, announced at $435 million (and already the most expensive ever), which had ballooned to $950 million. It was approved by the state at $637.2 million.

Spokesman Joe DePlasco offered this quote: "We are continuing to speak with many arena experts and working hard to find ways to build a world class venue in an incredibly difficult economic environment."

Financing costs

The Gowanus Lounge's Bob Guskind on December 31 was prescient (and I wasn't):
Our prediction: Developer Bruce Ratner will have difficulty obtaining financing for a nearly $1 billion Gehry arena and the arena will either be scraped or a new version from an off-the-rack firm for $500 million will be built.

Would the arena look more like the Atlantic Lots design produced by the Municipal Art Society (right) than Gehry's latest design (top)? Or would it just look more ordinary, like the Prudential Center in Newark, which cost under $400 million, and is increasingly being suggested as an alternative?

(Update: I should add that the Prudential Center is a state-of-the-art arena and far superior to the Izod Center. But it is a standalone box.)

There's another reason behind the "value engineering," I surmise. There's just no way the land underneath the arena could be valued high enough for the foregone taxes to be sufficient to match the PILOTs, or payments in lieu of taxes, needed to pay off a $950 million arena.

Will valuations have to be "jacked up," as with Yankee Stadium, to pay off a $500 million arena? Stay tuned.

The value of the Gehry name

So why is Forest City Ratner insisting Gehry is still on the job?

Because, even if his role has diminished and his vision compromised, until Gehry walks, he's still a huge selling point for the project. After all, Barclays didn't commit a reported $400 million in naming rights for an arena designed by "just some guy" (to quote former MTA Chairman Peter Kalikow's dismissal of the agency's own appraiser).

And the big spenders who've committed to buying luxury suites in the Barclays Center, as well as the ones still considering purchases, must consider the Gehry cachet. The Barclays Center web site (right) touts Gehry as "one of the world’s most respected and celebrated architects." Other sponsors surely want to back in Gehry's glow.

It was Gehry who wowed New York Times architectural critics Herbert Muschamp (Courtside Seats to an Urban Garden) and (initially) Nicolai Ouroussoff. It was Gehry who drew praise from the Times editorial page, which told us that the buildings "would add a sense of excitement." It was Gehry who convinced New York magazine essayist Kurt Andersen that "Our long architectural snooze is over... Brooklyn should embrace him."

Tensions over the truth

That's why Forest City has regularly insisted that Gehry would design the arena and all the towers, despite his request to bring in other architects and landscape architect Laurie Olin's prediction that other architects would play a role.

(At right, original p.r. materials released 12/10/03. Click on graphics to enlarge.)

Remember, the New York Observer reported in February 2007:
“Laurie has his views,” countered Jim Stuckey, executive vice president of Forest City Ratner. “We don’t believe it is going to take 20 years. We expect that it will take 10.”

He added, “Frank Gehry will be the architect on every one of them.”


The now-departed Stuckey was way wrong on the first prediction. He's likely wrong on the second.

For now, something--loyalty? money? pride? a gag order?--is keeping Gehry from talking.

Remember, in a 5/5/08 press release, he dutifully declared:
“After a productive collaboration, our work for Atlantic Yards has come together in a way that makes me very pleased.... The design for Miss Brooklyn, which we now call Building One, has become very special for me. In response to the new program, it has evolved and has become slimmer, more elegant and more festive and is ideally suited for an office building... I am very eager to continue working on this project with my partner Bruce Ratner.”

Gehry said in January 2006, "If I think it got out of whack with my own principles, I’d walk away." Ouroussoff in March 2008 suggested he was already there.

ESDC defers to Ratner?

The Wall Street Journal reported, in an article headlined Developer May Scale Back Plan for Nets' Brooklyn Arena, that Gehry "has overseen the design of nearly every element" of the Brooklyn arena, but noted a "final design has never been approved.

The money quote came from Warner Johnston, spokesman for the Empire State Development Corporation (ESDC), who told the newspaper "The aesthetic choices are Forest City Ratner's."

He's technically right, given that nothing binds a particular architect to a project, though Gehry's office did produce the Design Guidelines issued under the ESDC's rubric. But city and state and borough officials sure went along for the ride, embracing Gehry, who appears prominently on the developer's web site (right).

On 3/3/05, a mayoral press release and an ESDC press release announcing a Memorandum of Understanding both promised "a Frank Gehry designed world-class arena."

The ESDC's 12/8/06 press release touting the project was unequivocal:
The almost $4 billion Atlantic Yards project designed by world-class architect Frank Gehry will transform an area that is currently blighted and largely underutilized into a vibrant mixed-use community.

There was some wiggle room in the ESDC's Modified General Project Plan: It is currently anticipated that the buildings will be based on designs by Frank Gehry, a world-renowned architect.

The arena was also anticipated to open in 2009, with the entire project to be completed in a decade.

Past bait-and-switch

If it's bait and switch, it certainly wouldn't be the first example. Remember, Forest City Ratner once promised 10,000 office jobs, a nice round number that enticed a couple of columnists.

The developer promised that half of all the housing units would be affordable, then said that ratio would apply only to the rentals. Originally, 900 of the 2250 affordable rentals were promised to moderate-income people earning 50%-100% of Area Median Income (AMI), but now only 450 units would go to that cohort, with 900 units for those earning above the AMI.

What set off the press?

In none of the three articles was a source cited, and the New York Times, in a CityRoom blog post headlined Atlantic Yards Developer Denies Removing Architect, began with a rumor detached from even a source:
The rumor this week concerning the troubled Atlantic Yards project near Downtown Brooklyn had the developer firing the famed architect Frank Gehry, who designed the project’s centerpiece: a $1 billion basketball arena.

But the rumor was sufficient to provoke coverage, right? Maybe they should've told us the source; as far as I know, it didn't come from fans of the project.

It can be dodgy to report on rumors, but the rumor that Gehry stopped work on the project was apparently true, and this one has some credence, too.

I commented that the Times was mis-framing the issue when it reported that Forest City Ratner had not "gotten rid of Mr. Gehry," because the developer, as evidence suggests, could be exploring “less expensive ways to build the arena” by simply not paying him. The Times also reported the claim that Forest City Ratner stopped site work because of lawsuits, which isn't credible.

(The Times article did not appear in print. The New York Post did run a brief article.)

Money worries

Things certainly have changed in three years. New York magazine's Andersen wrote 11/20/05:
Given Ratner’s track record, I asked Gehry if at first he mistrusted Ratner’s professed new dedication to quality and innovation. “Yeah. Yes, I did.” And how did he get over his skepticism? “I’m still getting over it,” he says, although so far, “the budget busts have not been architectural ones. He’s always voted with me on the side of the architectural. He runs into roadblocks sometimes in his company, but it has not been cataclysmic.”

Now, according to the Daily News, Ratner's in arrears with the architect. The headline: Brooklyn Nets Arena cutbacks? Bruce Ratner scales back plans; Star architect Frank Gehry may go.

(Oddly, the Daily News chose a 2005 graphic rather than a 2006 one or the current one.)

Andersen understood the politics behind Gehry's choice:
Ratner isn’t spending 15 percent extra on these new buildings simply because he wants to underwrite cool design. He understands that in Brooklyn, just as his quotas of apartments for poor people and construction jobs for women and minorities were ways of winning over key constituencies, hiring Gehry was politics by other means, sure to please the city’s BAM-loving chattering class. “The spirit of what you say,” Ratner agrees when I posit this theory, “is accurate.”

(At right, Gehry is touted in the second, and final, issue of the Brooklyn Standard "publication," which appeared in Fall 2005.)

Is it about pride?

In an odd coda to this all, a Brooklyn Eagle essay published yesterday an hour before the Gehry news was headlined Atlantic Yards: Is Pride Driving Ratner? In it, Raanan Geberer citied sketchy reports "often from biased news sources" about Atlantic Yards "getting bogged down in problems with construction financing (stemming from the current recession) and lawsuits."

Biased sources like the radical Wall Street Journal? (Eric McClure offers a thorough dissection on NLG.)

The columnist's big thought: This leads one to ask: Is Bruce Ratner’s desire to be acknowledged as a great developer and leader the main force in stubbornly keeping this project on the table?

This leads one to point instead to the big losses suffered by the New Jersey Nets ($22.4 million absorbed by FCE) and the team's declining value.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

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…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…