Thursday, December 10, 2009

A minimum of 10 community events vs. a maximum of 10 events; how FCR frames the same arena pledge differently for community groups and bond buyers

When it comes to making the Atlantic Yards arena available to community groups, Forest City Ratner has promised those groups at least ten events a year, but it has told potential bond buyers that ten times is a maximum.

Also, in a seeming contradiction, it has told community groups the arena would be made available at a discount, but it told bond buyers it wouldn't.

FCR seems to be emphasizing generosity to one audience but fiscal prudence to another.

(Emphases added below)

From the FEIS and CBA

The Empire State Development Corporation's (ESDC) Final Environmental Impact Statement (FEIS) for the Atlantic Yards project states in Chapter 1, Project Description:
The arena is expected to host approximately 225 events per year. Of these, a minimum of 10 events would be made available for use by community groups at a reasonable cost (generally the cost of operation) with any net proceeds to the sponsor from these events to be donated to not-for-profit organizations.
That's pretty much the same as what's in the Community Benefits Agreement (CBA), which states:
(1) Events. The Arena will be available to Community groups for at least ten (10) events per year, at a reasonable rate, with net proceeds from such events to be used to support non-profit community organizations.
From the bond documents

However, there's something else in the Barclays Center Project Preliminary Official Statement prepared by Goldman Sachs, (G-4, or p. 298 of the PDF) :
Tenant shall make the Arena available to ESDC or its designee for use as a venue for civic, cultural, social or other events as requested by ESDC, not to exceed ten (10) events in any lease year, which access shall be on the same terms, including cost, as the Arena is generally made available to other Persons for use.
Asking for clarity

I queried the ESDC and spokeswoman Elizabeth Mitchell responded, "The language you cite does refer to the CBA's 10 events. The reference to ESDC is intended to reflect our recognition of FCR's commitment to the community and ESDC wanted to make sure it was reflected in an arena document. It should be noted that this is actually redundant because CBA has their own agreement where this is documented."

It may be redundant, but it definitely has a different spin.

The CBA suggests than ten events is a minimum, perhaps leading community groups that signed it to imagine that there could be many more events. But the bond document states that ten is a maximum.

And the latter talks about renting the arena on the same terms as for any client, while the CBA/FEIS say the arena would be rented at reasonable cost.

The CBA, which is a contract, is supposed to be enforceable, so presumably Forest City Ratner would be required to rent the arena at a reasonable cost.

If so, why was the developer trying so hard to minimize the commitment to bond buyers?

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