Despite lavish groundbreaking, two signs of cash flow difficulties for Forest City Ratner; are more subsidy tweaks on the agenda?
But Forest City Ratner, despite the lavish, well-publicized groundbreaking for the Barclays Center on March 11, has its struggles, one well-publicized via Crain's New York Business, one not really noticed at the groundbreaking ceremony.
That doesn't necessarily portend serious trouble for Forest City Ratner--though it casts further doubts on the developer's questionable pledges to build the project as proposed. At the least, it might spur the developer to push, as it did last September, to get pledged subsidies for Atlantic Yards delivered faster, and ensure that subsidies encompass a broader set of costs, thus boosting liquidity.
Loan missed at MetroTech
Crain's reported, in an article headlined Two big developers hit financing difficulties:
In another sign of distress in the city's real estate market, Forest City Ratner failed to make mortgage payment on 10 Metro Tech Center, part of its huge office complex in downton Brooklyn. As a result that loan was placed on a watch list, Trepp said.Gramercy Capital
The Forest City news is somewhat surprising because it has not been a fixture on such lists.
It is too soon to say whether the loan on 10 Metro Tech is headed for a special servicer. The loan has a balance of $52 million, according to Trepp. Tenants at the building include the International Revenue Service and New York City's Human Resources Administration.
Forest City Ratner didn't have an immediate comment
It snuck by nearly everybody at the groundbreaking ceremony. I watched the video (via the Mayor's web site) and there, at about 48:04, Bruce Ratner let it out briefly.
"One other very important organization, speaking of sticking with it, Gramercy Capital. They started as our land lender, our land lender!" he said, with a mix of exuberance and slight incredulity. "These economic times made them our partner."
That sounds like, in exchange for missing payments, Gramercy was given a piece of the deal.
Remember, in February 2009 we learned that the developer got an extension on a $177 million loan from Gramercy for property in the AY footprint.
A partnership is more than an extension.