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So, where's the $324.8 million more for the arena going to come from?

Eliot Brown of the New York Observer points to a major gap in funding for the Atlantic Yards arena, the need for $324.8 million, money not yet in hand but expected to be raised within a year.

The money would come from Mikhail Prokhorov (aka "New Investor"), additional financing, and new equity from Forest City Ratner or third parties.

FCR told investment analysts earlier this month it planned to invest $200 million in equity, but, as Brown writes, " it's not as if developers generally have $200 million just lying around." (Forest City hasn't yet publicly commented.)

And it's not clear to me what role the unmentioned taxable junk bonds would play in this.

The details

From the Barclays Center Official Statement: As one of the Vacant Possession Release Conditions, and as required under the Arena Lease Agreement, ArenaCo will be obligated to pay or cause to be paid the Additional Rent Amount (presently anticipated to be $324.8 million, which amount may ultimatel…

Can $8.1M in infrastructure contingency funds pay for repairs on damaged MTA tunnels when neither extent nor cost has been assessed?

Remember that confidential December 2007 report commissioned by developer Forest City Ratner and provided to the Metropolitan Transportation Authority (MTA), which stated that portions of two subway tunnels were in critical condition and required repair "in the immediate future" and the "near future"?

The MTA, as I wrote in August, would not provide details concerning the amount of repairs completed or planned, or how such repairs would be funded.

Now we learn the repairs would be paid for via a contingency fund in the budget for the arena project, but the extent of the damage--nor, obviously, the cost of such repairs--has not been determined. And there's only $8.1 million available for Infrastructure Contingency.

That raises lingering questions about whether the contingency funds would be sufficient.

According to the Barclays Center Official Statement, prepared by Goldman Sachs for the tax-exempt bond deal, a document called the Transit Improvement Agreement--yet …

According to bond deal, in absence of Urban Room, Ratner can leave temporary canopy over new subway entrance for ten years

Remember, a new subway entrance is supposed to be built on the south side of Atlantic Avenue--but it won't be enclosed in the Urban Room, because the latter structure is depending on Building 1, the office tower for which, as Bruce Ratner told Crain's, there's no timetable.

According to the Barclays Center Official Statement, prepared by Goldman Sachs for the tax-exempt bond deal, a document called the Transit Improvement Agreement--yet unseen--gives the developer (via a subsidiary termed, in shorthand, RailCo) ten years to house the entrance in a temporary canopy before the Metropolitan Transportation Authority would build a permanent one at the developer's expense.

In other words, they have a decade to construct Building 1.

From the document:
RailCo may install a high quality fabric and steel temporary canopy over the Subway Entrance in accordance with the approved plans and specifications. If RailCo or its affiliate or its successor does not commence the construction of…

Yormark moves the goalposts, asserts Brooklyn "sometime in calendar year 2012," claims construction has commenced

On 11/24/09, after the decision in the Atlantic Yards eminent domain case, Forest City Ratner and the Nets said "the intent that the Nets will play ball in the Barclays Center in the 2011-2012 NBA Season."

Yesterday, Nets CEO Brett Yormark offered some clarification, telling the YES network, "We will be getting into the Barclays Center sometime in calendar year 2012."

That means the 2012-13 season, I'd bet. Remember, a market study attached to the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs) states, "It is assumed that the arena will open in May of 2012. As such, the year ending June 30, 2012 only reflects two months of operations." And there's no revenue for 2011-12 ticket sales.

Construction begun?

Yormark also said, "we commenced construction," but that's rather ambiguous. The developer has continued longstanding demolition and utility work, but has not had an official groundbreaking. Nor has the Em…

Some 2009 AY round-ups, from the Daily Eagle, Curbed, the New York Post, and Streetsblog

I'll be posting my 2009 round-up in 2010 (sorry), but here are four AY mentions--two pro, two con--worth noting in other publications' end-of-the-year wrap-ups.

The Brooklyn Daily Eagle

In a column, the Brooklyn Daily Eagle's Dennis Holt asserts that "Few people [at the opening press conference] could have foreseen the bitterness and anger that lay in the future for this project," to which NoLandGrab's Eric McClure responds, "Actually, we think it was probably quite easy to foresee the rancor the Atlantic Yards project would engender, especially once the audacity and magnitude of the land- and subsidy-grab became clear."

Curbed awards

Curbed, in typically restrained language, targets the "facade architect" of the AY arena:Our Favorite Architectural Sell-Outs
Dude, can you believe they're using that Vampire Weekend song in a fucking commercial now? Or that those dudes at that hip architecture firm SHoP scored a commission from fucking Bruce …

ESDC files, shares condemnation petition, but condemnees will resist; will January 29 be the day it's resolved?

While it's difficult to challenge a condemnation petition--"It has to be limited to procedural defects, and that’s rare," attorney Michael Rikon told me--the Empire State Development Corporation's (ESDC) legal filing to take private (and public) property within the Atlantic Yards footprint won't be a walkover. (The petition is at bottom.)

"We will challenge the petition. It is defective in many respects," stated attorney Matthew Brinckerhoff, who is representing condo owner and Develop Don't Destroy Brooklyn spokesman Daniel Goldstein (and perhaps others). "The details will be laid out in our opposition to the petition, which we are working on."

Brinckerhoff was the lead attorney for the plaintiffs in the unsuccessful constitutional challenge to the ESDC's use of eminent domain; he has asked the Court of Appeals to reopen the case in light of seemingly contradictory decision by a lower court in the case challenging the ESDC's use of …

During a short walk from Fort Greene to Prospect Heights, the contrasts and contradictions of Brooklyn

It was just a short walk, less than a third of a mile. But Brooklyn's contrasts and contradictions were manifest during a walk I took on November 24, a few hours after we learned that the state Court of Appeals had green-lighted the state's use of eminent domain, justified in part by removing "blight" in Prospect Heights, to build the Atlantic Yards project.

There, at the corner of Fulton Street and South Portland Avenue, a major shopping corridor in the gentrified section of Fort Greene, Brooklyn Borough President Marty Markowitz hosted a press conference outside the new Greenlight Bookstore, a most-local independent bookstore started with the help of a prize in a small business plan contest sponsored by the Brooklyn Public Library.

The new novel by Brooklyn author Jonathan Lethem, a member of the Develop Don't Destroy Brooklyn advisory board and noted critic of the Atlantic Yards plan, was in the window.

Markowitz and other were boasting "Shop Brooklyn" …

Perkins sets hearing January 5 on Columbia University eminent domain case, need for reforms

The Senate Standing Committee on Corporations, Authorities and Commissions, chaired by Senator Bill Perkins, will hold a hearing 4-7 pm on Tuesday, January 5, titled "Unconstitutional: What the Appellate Division’s Eminent Domain Ruling Means for the Columbia Expansion."

While the hearing seems focused on the recent decision stopping--for now--the Empire State Development Corporation's pursuit of eminent domain for the Columbia University expansion, some of the broader questions invoke the Atlantic Yards example and situation:
How should the process be reformed? What are the benefits of a moratorium on eminent domain takings pending legislative action?

Note that oral testimony is open to the public, with a three-minute limit, and written testimony is also accepted. It's unclear who's been invited.

Perkins is the most prominent legislative supporter of eminent domain reforms, while Gov. David Paterson backs an appeal by the ESDC to the Court of Appeals.

The court ruled…

Gotham Gazette's 2010 predictions: three contributors are down on AY (where's Marty?)

If you didn't know better, by reading Gotham Gazette's 2010 predictions you'd think that Forest City Ratner's Atlantic Yards project is on its last legs rather than survived a key decision on eminent domain and seen the sale of $511 million in arena bonds.

That's not to say that the kinks in the bond deal--escrow until the delivery of property by condemnation--don't leave wiggle room for additional challange. But the advantage has to go to FCR, and it's surprising that no contributor--hey, where's Marty Markowitz?--pointed that out.

Excerpts from the article are below, with each individual's statements excerpted except for those from Daniel Goldstein.

If Atlantic Yards proceeds, one legacy may be tougher legislation on eminent domain.

State Senator Bill Perkins

I would like to see continuing types of reform we were able to pass this year like the public authorities reform bill.

I am looking forward to introducing legislation on eminent domain reform. I th…

The Times takes a look at the Municipal Art Society, but gets the Atlantic Yards angle wrong

In a New York Times article today headlined New Leader Seeks Stronger Voice for Art Society, the Municipal Art Society is criticized for not speaking as loudly and effectively as it once did on urban design and preservation issues, such as when it helped save Grand Central Terminal. (They wanted to tear down Grand Central Terminal!)

So Vin Cipolla, who's replacing longtime leader Kent Barwick, is challenged to rebuild the membership, revenues, and board of MAS--and to speak louder.

And that touches on Atlantic Yards, but the Times doesn't understand MAS's role regarding AY, leaving out the organization's failure to address the process behind the project.

(The Times assigned the article to its architecture reporter, who hasn't covered AY, and places it in the Arts section, though coverage of urban design and preservation issues would go better in the Metro section.)

A big voice?

The Times reports: Vin Cipolla, 53, who replaced Kent Barwick as president of the society ear…

How many jobs, really? ESDC quietly added nearly 4000 construction job-years between June and September

So, how many jobs would there be at the Atlantic Yards project?

The numbers are confusing, as the Empire State Development Corporation (ESDC) in September significantly changed its projection on construction jobs without explaining exactly why. And Forest City Ratner, in its most recent press release, has doubled the number of permanent jobs projected.

Construction jobs

For years, Forest City Ratner said there'd be 15,000 construction jobs, which actually meant 15,000 job-years, or 1500 jobs a year over a decade.

Of course, if the project takes longer than the promised decade--which, if it is built, seems a good bet--there'd be fewer jobs per year.

The ESDC, in its July 2006 General Project Plan, estimated 15,344 new direct job years and 26,803 total job years (direct, indirect and induced).

But the numbers have kept changing, and we don't have backing information. And if you read recent legal papers, it would be easy to get confused.

From the ESDC's MGPP

Here's the ESDC&#…

Video: a walk around the arena block footprint shows traffic, demolitions, and perspectives from a wide road and a low-rise neighborhood

Early in the afternoon on December 24 I took my camera to shoot some video (bottom) around the footprint slated for the arena block, the western third, more or less, of the site plan.

(December 22 photo of Atlantic Avenue at Fifth Avenue, looking east, by Tracy Collins.)

I wanted to see the new advertising signage erected by Forest City Ratner after the master closing and I wanted to see the impact of the new traffic plan, in which Fifth Avenue is limited to northbound traffic between Flatbush and Atlantic avenues, and southbound traffic is diverted to Sixth Avenue.

Bottom line observations

My conclusion: on a high-traffic day, the traffic was pretty bad, with gridlock at Atlantic Avenues going into Fort Greene Place (the northern extension of Fifth Avenue between the Atlantic Terminal and Atlantic Center malls), though it was manageable with the help of traffic officers.

That's an interim condition, of course, because Fifth Avenue would be completely demapped, either compounding the…

At another Freddy's media event, a makeshift guillotine is used to execute an eminent domain effigy

Last week the staffers and regulars at Freddy's Bar & Backroom, slated to be demolished for the Atlantic Yards arena, installed "chains of justice" so resisters can handcuff themselves to the bar to protest the anticipated eviction.

This week came another media event, the guillotine, a creative structure made out of Pabst beer cans, used to execute an effigy representing "eminent domain theft."

And yes, the media came out--far more than at some of the important legal arguments or governmental meetings. Everybody loves a good metaphor.

At left above, executioner Steve de Sève (producer of video at Freddy's Brooklyn Roundhouse) and Death, portrayed by Elliot Crown, in action.

(Photos on left by Amy Greer/No Land Grab.)

The action begins

Bar manager Donald O'Finn read from a scroll, declaring a revolt against eminent domain law and criticizing the role of ACORN, the British bank Barclays, which bought the arena naming rights that the state gave away, and Ru…

Daily News finds a silver lining in the availability of cheap Nets tickets

In an article today headlined Cheap premium tickets available to see New Jersey Nets, NBA's worst team, the New York Daily News reports:New Jersey Nets fans finally have something to be happy about.

Premium tickets to see the woeful NBA team play are selling for less than the cost of a stadium beer - as little as $7 - on sites like eBay and StubHub.com.Well, it depends on which fans we're talking about. If fans with season ticket packages are unloading tickets because they don't want to see the team any more--or if they can't attract friends/guests--then those fans aren't happy; they're losing money.

And perhaps the market is simply speaking; a ticket has become cheaper than a movie because the quality of entertainment is (often) lower. And, of course, the cost of a visit, including parking/transportation and refreshments, is much higher than the ticket.

Who wrote that pro-Bruce letter to the Times? A Ratner spouse (and the Times either didn't ask or was lied to)

If you search the term "Bruce Ratner"--not "Bruce C. Ratner" on the New York Times web site, the "closest match"--not the newest--is a letter, and some footnotes are in order.

The letter, published in the 6/11/06 edition of the Times, responded to architecture critic Nicolai Ouroussoff's piece about the complex and difficult relationship between architect Frank Gehry and his clients, notably developer Bruce Ratner:
After reading this article, I am left feeling that Bruce Ratner, taking a huge gamble, is proceeding in a smart, businesslike way. The risks are enormous and Mr. Ouroussoff pays no heed at all. Perhaps he ought to start a fund to develop any mad, beautiful, outrageous or significant work of architecture of his own and put his money where his mouth is.

Michael Salzberg
Bethesda, Md.Looking more closely

Why did someone from suburban Washington, DC take such a keen, supportive interest in the Atlantic Yards project?

Why did he claim that the project…

Project Finance on escrow situation: "one important kink in the deal's structure"

I again checked to see if any mainstream press outlets had even mentioned the murky Brooklyn Arena Local Development Corporation (BALDC)--answer: no--but was reminded that two finance publication pointed out that the arena bond deal would not be done after the sale was completed.

In other words, though the project may be closer than ever, it's not over, given the escrow provisions.

Deal kink

An 11/24/09 Project Finance article headlined Goldman plans Nets offering memo next week (full article only to subscribers) stated: The legal challenges have placed one important kink in the deal's structure. If the bonds are sold but the issuer does not have free and clear title to the land, the proceeds would be placed in escrow by the bonds' trustee, Bank of New York Mellon, and only released when the issuer has control of the site. If, within a year, the project does not have control of the site, the proceeds of the bonds would be returned to the lenders, and Forest City Ratner has pr…

Goldberger on Lopate: "Atlantic Yards was and is a mistake" (but might be re-thought over time)

Yesterday's Leonard Lopate Show on WNYC Radio, Why Architecture Matters, was a rebroadcast of an 11/17/09 interview with New Yorker architecture critic Paul Goldberger, keyed to his new book of the same name and his book titled Building Up and Tearing Down: Reflections on the Age of Architecture, an anthology of criticism, mostly from The New Yorker.

Goldberger, speaking before the eminent domain case had been decided in the Court of Appeals and before the bond sale--both of which have given AY significantly more momentum--said Atlantic Yards "was and is a mistake," given that megaprojects don't do much for street life, and suggested that the silver lining of the recession might give it time to be improved.

Goldberger talked more about the Chrysler Building (on the cover of Why Architecture Matters) and the World Trade Center ( "our first modern architectural martyrs"), making an intriguing point about the latter.

While he never felt good about the Twin Towers…

Civic News coverage of BrooklynSpeaks lawsuit quotes a PSCC trustee: "All attempts at persuasion have failed"

Well, I'm getting to it a bit late, but coverage in the Park Slope Civic Council's (PSCC) Civic News of the BrooklynSpeaks lawsuit challenging the Empire State Development Corporation's approval of the revised Atlantic Yards plan is worth a read.

(The lawsuit was filed November 19; Ezra Goldstein's article is dated December 1, but didn't arrive in print form until recently.)

No chance for changes

Notably, it reminds us that those who tried to "mend-it-don't-end-it" finally hit the wall: Assemblyman [Jim] Brennan, whose office attempted to facilitate communication between BrooklynSpeaks and the state, said he finally concluded that “there has never been any interest in any modification of the project or its governance. The state government, basically acting as the agent of Forest City Ratner, never had any interest in reforming or modifying the project to address any community or public concerns about balancing public good versus private interest.First PS…

Another plan for the old Times building is a reminder of the missing back story

In an December 23 article headlined Former Times Building to Be a Hotel and Condos, the New York Times's Charles Bagli reports: Lev Leviev, the Israeli billionaire, made many New Yorkers sit up and take notice when he bought the former New York Times Building on West 43rd Street in 2007 for $525 million, three times what the seller paid for it 30 months earlier.

It was a bold declaration that Mr. Leviev, who planned to spend an additional $170 million transforming the landmark building into a first-class office building, wanted to be a real estate player in New York. It was also a deal emblematic of an era when buyers and bankers imagined that rents and values would soar forever.Now Leviev wants to turn the building into a mix of luxury shops, a bowling alley, a high-end hotel, and 26 penthouse condominiums on top. And some of the lenders who lent Leviev $711 million have had to take a bath.

It's a prime example of real estate froth and well worthy of coverage.

But the Times, as …

Brutally weird holiday news from NYT: Stadium Boom Deepens Municipal Woes (no mention of AY or other NYC projects)

From today's New York Times, an article headlined Stadium Boom Deepens Municipal Woes: CINCINNATI — Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets.

From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.

Nowhere is the problem more acute than in Cincinnati. In 1996, voters in Hamilton County approved an increase of half of one percent in the sales tax that promised to build and maintain stadiums for the Bengals and the Reds, pay Cincinnati’s public schools and give homeowners an annual property tax rebate. The stadiums were supposed to spur development of the city’s dilapidated riverf…