Tuesday, March 31, 2009

At today's conference call, will investment analysts finally ask FCE what exactly Frank Gehry is doing?

Last December 10, I challenged the investment analysts following Forest City Enterprises to ask the company some tough questions about Atlantic Yards, notably the reason for stopping work at the Vanderbilt Yard and the timing of the project. They didn't.

Today they have another more opportunity, at an 11 a.m. conference call.

As I wrote, the investment analysts have heard those executives continually revise the timetable for and the promises regarding Atlantic Yards without acknowledging the inaccuracy of past statements. 

If the analysts don't ask some hard questions, they will sound ever more captive of the companies they cover, another example of the failure of the Wall Street ecosystem.

(FCE A stock closed yesterday at $3.41, down 8.9% from $3.74.)

What's Gehry's role?

This conference call should make it a little easier to focus on Atlantic Yards, because the arena is one of only two projects the developer expects to launch this year (though the timetable is questionable).

The important questions regard architect Frank Gehry, who's been a huge selling point for the project as a whole and the arena, which has gained a naming rights deal from Barclays and numerous other sponsors.

But if Gehry's off the project, then the arena becomes much less sexy.

In remarks published last week, Gehry said of Atlantic Yards, "I don't think it's going to happen." That led to backpedaling from Bruce Ratner, Gehry himself, and Nets CEO Brett Yormark.

The developer says Gehry is still the lead architect. But Gehry's laid off his staff working on Atlantic Yards. So what does that mean:
  • Is Gehry still working on the project? How actively?
  • Will he rehire staff to work on the project?
  • Have other architects taken Gehry's designs and reworked them to save money?
In other words, is it still a Frank Gehry arena?

What about Turner Construction?

And maybe they can ask if Turner Construction, which produced the construction timetable and was called "a preeminent construction management company" in an affidavit by former FCR executive Jim Stuckey, is off the job, as a Curbed tipster suggested.

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