Friday, December 04, 2009

Why the arena would cost about $900 million--and why the Carlton Avenue Bridge job hasn't been paid for yet

In the Empire State Development Corporation's 2009 Modified General Project Plan, the Atlantic Yards arena was to cost $772 million, but there was also $717 million for project infrastructure as a whole.

Now, according to the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs) states, the arena would cost $904.3 million, including $807.1 million for site preparation costs, hard costs, soft costs and contingency, plus $97.2 million for Arena Infrastructure. Add to that $195 million in Related Infrastructure needed for the arena to open.

That adds up to just about $1.1 billion.

Arena Project $904.3 million

From the document:
Arena Project costs including site preparation costs, hard costs, soft costs and contingency which total approximately $807.1 million and Arena Infrastructure costs total approximately $97.2 million. Total Arena Project costs will thus equal approximately $904.3 million. Of the approximately $904.3 million of total Arena Project costs, approximately $156.5 million has been contributed as of October 31, 2009, which amount includes $85 million in funds received under the City Funding Agreement. As of November 1, 2009, approximately $747.8 million in costs will be required to complete the Arena Project (approximately $655.8 million are Arena costs and approximately $92.0 million are Arena Infrastructure costs). Of the approximately $655.8 million of remaining Arena costs, approximately $481.3 million are covered by the provisions of the Arena Design/Build Contract (exclusive of approximately $3.3 million which has been paid to the Arena Design/Build Contractor). The approximately $481.3 million covered by the Design/Build Contract includes approximately $19.7 million of contingency. Furthermore, there is an additional Arena Project contingency in the amount of approximately $33.4 million. Contracts have not yet been entered into for the construction of the Arena Infrastructure.
Related Infrastructure $195 million

From the document:
In addition to the construction of the Arena Infrastructure, certain other items of infrastructure (the “Related Infrastructure”) will be required in order to open the Arena. Total Related Infrastructure Improvement Costs are projected to be $195.0 million, approximately $94.5 million of which has been incurred as of October 31, 2009 with $100.5 million of which is remaining to be incurred. The costs of such Related Infrastructure are not covered by the proceeds of the Series 2009 PILOT Bonds.

Such work overlaps with that of the Atlantic Yards Project, some of which is in progress and all of which will be performed by AYDC or its affiliates and funded from other sources, including but mot limited to amounts received from the State under the State Funding Agreement. Funds needed to complete the Related Infrastructure will be deposited by AYDC in a trust account, separate from the funds and accounts established under the PILOT Bonds Indenture for the Series 2009 PILOT Bonds, on or about the date on which ESDC acquires vacant possession of the Arena Premises and certain other parcels within the AY Project Site, as described below under “—Infrastructure Trust Agreement.” However, if such funds are not made available at that time, the Series 2009 PILOT Bonds will be subject to extraordinary mandatory redemption as described herein. See “INTRODUCTION—Commencement Agreement” and “THE SERIES 2009 PILOT BONDS—Redemption—Extraordinary Mandatory Redemption.”

The Related Infrastructure will include the following work necessary for the development, construction, equipment and operation of the Arena: construction of a temporary rail yard in order to move most of LIRR operations off of the Arena Premises; excavation and relocation of sewer pipes and water mains from Fifth Avenue and Pacific Avenue to permit construction of the Arena Project and to service the Arena; demolition of existing improvements; environmental remediation, and the rebuilding of the Carlton Avenue Bridge which links Atlantic Avenue and Pacific Street on the East side of the AY Project Site, between Sixth Avenue and Vanderbilt Avenue. Parking to service Arena patrons on a nonexclusive basis will initially be provided on the eastern side of the AY Project Site, on Block 1129 on the Borough of Brooklyn Tax Map (“Block 1129”), to service the Arena. See “ARENA MANAGEMENT AND OPERATIONS⎯Project Leases and Agreements⎯Parking Easement.”
The Carlton Avenue Bridge

Wonder when the Carlton Avenue Bridge would be reconstructed? (It was supposed to take two years but instead would take at least three years.) Well, the money is supposed to be coming.

From the document:
Infrastructure Trust Agreement. The funds necessary to complete the Related Infrastructure will be held pursuant to the Infrastructure Trust Agreement among AYDC, the City and The Bank of New York Mellon, as Infrastructure Trustee (the “Infrastructure Trust Agreement”). The Infrastructure Trust Agreement requires that, at the time of the delivery of vacant possession the parcels that make up the first taking of land within the AY Project Site, including the Arena Premises, (i) $15.0 million be placed in a Bridge Construction Account to be used for costs of the construction of the Carlton Avenue Bridge, and (ii) such funds as are required by the Construction Monitor to complete other Related Infrastructure improvements be placed in an Infrastructure Improvements Account (such account, together with the Bridge Construction Account, the “Infrastructure Fund”). The Infrastructure Trustee will disburse the funds in accordance with the requisition requests made by the Construction Monitor. Pursuant to the Infrastructure Trust Agreement, no requisition requests to draw funds from the Bridge Construction

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