Skip to main content

ESDC CEO Lago admits the obvious: Atlantic Yards would take “decades”

When the Atlantic Yards project was approved in December 2006, it was supposed to take a decade, according to the construction schedule attached to the Final Environmental Impact Statement (FEIS) issued by the Empire State Development Corporation (ESDC)

Yesterday ESDC CEO Marisa Lago acknowledged the obvious: it could take decades.

Upon approval

Faced with questions about expected delays, then ESDC Chairman Charles Gargano stated, “If the project is estimated to take ten years and we have some delays, as a result of lawsuits or whatever, it could take 11 years, or 12 years. So what. But we have an estimate, assuming we have no unnecessary delays, of ten years, given to us, by expert developers.”

On 4/30/07, well before the economic downturn, I questioned whether the schedule was a reference or fantasy, pointing out that project landscape architect Laurie Olin said it could take 20 years and that CEO Chuck Ratner of parent company Forest City Enterprises said it could take 15 years.

Resisting the obvious

In court papers last May filed in a case brought by residents of two footprint buildings, however, the ESDC asserted that contractual remedies, which offer no sanction for delays on Phase 2 and give a long leash to the arena (6+ years) and the towers of Phase 1 (12+ years) “do not modify the Project schedule.”

Court papers referred to the General Project Plan (GPP) passed in December 2006: 
The GPP states that "[i]t is expected that all of the Phase 1 buildings would be completed and opened by 2010."... The GPP also states that the full build-out of the Project is "expected by the year 2016."

Beyond that, ESDC lawyers called “purported quotations from [Forest City Ratner CEO] Bruce Ratner” regarding project delays “pure hearsay as to ESDC,” and suggested that other statements by Ratner—asserting a ten-year buildout in a Daily News op-ed shed light on claims of delays.

In a court hearing last June, an ESDC lawyer said that Forest City Ratner is required to use “commercially reasonable efforts” to move forward.

What does that mean?

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

Lago offers some candor

Yesterday, in the “on the record” part of the "On/Off the Record" breakfast with ESDC CEO Lago sponsored by City Hall News, inteviewer Edward-Isaac Dovere brought up Atlantic Yards.

ED: Let’s finish... with everybody’s favorite, the Atlantic Yards, which doesn’t seem to be one that generates a lot of answers all the time.

ML: Obviously, challenging project again. Projects conceived in a different time and in a different economy, but, a few things: one, the focus now is very much on moving forward with the Nets stadium and with the housing that is on that first block, the first phase of the project. Attenuated time lines, I think, are a reality for private sector and for public sector projects. There is nothing wrong with that. We look at the history of the transformational projects that have occurred in the city. Earlier I was discussing with some of the folks here Roosevelt Island, a project that has grown over decades. 42nd Street, a project that has grown over the past 25 years and the scale of the Atlantic Yards is similar in that it is remaking, it is reknitting, a portion of the city. So, as I said, focusing on what can get done now in the current climate, what is financible now, and also recognizing that it is a project that is scheduled to grow out over multi-years, decades, not over months. 
(Emphasis added)

Neither Roosevelt Island nor 42nd Street were single-developer projects, however, so no developer, as has Forest City Enterprises, could claim that "we control the pace."

What does "decades" mean?

So, what does the term “decades” mean?

At the least, 20 years. Lago didn't say "more than a decade," which could mean 15 or 18 years. She said "decades."

State behind project to the hilt

Lago was nonplused about delays, noting that the project would be built over various economic cycles. 

While she wouldn’t predict a starting date for Phase 1, Lago said that the state was “aggressively” driving AY and that the city and state remained firmly committed to it.

City Hall News will publish excerpts, as well as the video of the "on the record" part of the session.

Comments

Popular posts from this blog

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…

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…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.