Skip to main content

Latest consultant's report: arena still ahead of schedule (lead nudges ahead), transit connection barely on schedule (and slowing); 422 workers

According to the latest Arena Site Observation Report (bottom), dated 10/7/11, the Barclays Center arena remains on schedule, having increased pace slightly. By contrast, while the associated transit connection to the Atlantic Avenue subway hub is on schedule, but it's pace has continued to slow slightly.

The estimate, based on cash flow, comes in a report prepared by Merritt & Harris, the real estate consultant to the arena PILOT Bond Trustee. Two months ago, the consultant stated that the transit connection was two months ahead of schedule. There's always a time lag; this latest report is based on a 8/25/11 visit and documents made available 9/25/11,

Reading between the lines

The meaning of the pace reported is not simple to assess, as the consultant's rather opaque. This new report nudges up the arena completion by four days, to 8/23/12, while nudging the transit connection back six days, to 4/1/12. The report does not acknowledge that the latter date represents a revision of the schedule.

The report does not mention of the reason for and impact of extended construction hours--though it seems reasonable to conclude that extended hours are needed to stay on schedule.

And while Forest City Ratner officials last month acknowledged that Hurricane Irene caused some construction delays, the consultant's report doesn't mention such delays. However, the relative slowdown in work at the transit connection may reflect a greater impact from the Hurricane.

Workers on site: 422

Page 41 of the document indicates 422 workers: 370 persons at the Arena and 52 persons at the Transit Connection.

By contrast, at the Atlantic Yards District Service Cabinet meeting 7/14/11, the developer reported 430 workers on site. At the meeting 9/22/11, the developer provided no numbers, but a representative of the state said, “We've estimated that there are currently 520 workers on a given shift."

Forest City Ratner likely counts additional workers on the railyard, which is not subject to bond funding and thus not subject to the consultant's report.

Still, as I've stated, such discrepancies might be explained by a report from the Independent Compliance Monitor (ICM) required by the Community Benefits Agreement, but no ICM has been hired.

Arena progress

The new document states:
The original High Level Arena Summary Construction Schedule, dated July 16, 2010, had been provided for our review. We subsequently received the Executive Level Summary for Schedule 12M, dated February 10, 2011, prepared by Hunt, that indicated substantial completion was anticipated to be attained by August 27, 2012. The latest Executive Level Summary, dated August 18, 2011, indicates substantial completion to be attained by August 23, 2012.
Punch list work and Subcontractor close-outs may extend the construction term to a final completion date of March 8, 2013.
This was the first mention of this latest Executive Level Summary, though, if it was dated 8/18/11, presumably it was available for last month's report.

The arena's slightly ahead of schedule. Note that, as indicated on the bottom row, the gap between projected and actual spending, down to 1.68% in last month's report, has risen to 2.55%. Click on graphics to enlarge.

Transit connection progress

The document states:
The latest Schedule, prepared by John Civetta & Sons, Inc., dated July 8, 2011, indicates mobilization of the Project began on August 2, 2010, with completion scheduled for April 1, 2012. The construction term of 20 months (August 2, 2010 - April 1, 2012) is reasonable, but, due to early delays with approval of the test piles, had slipped by approximately 1 month. Since excavation and demolition work was ongoing concurrently with the test piles operation, the Project is now on schedule.
As noted above, the construction term had not previously been said to end 4/1/12.
As the graphic above suggests, the project was once well ahead of schedule, but that gap has narrowed. As indicated on the bottom row, the gap between projected and actual spending has declined steadily for several months, and now is .61%.

Agreement reached

In another indication of opacity, the document no longer hints, as it has for months, that an agreement was needed to resolve schedule questions--perhaps because of the emergence of the latest Executive Level Summary

For example, according to the 6/2/11 report, Forest City Ratner and Hunt Construction were supposed to reach a resolution by May 2011.

According to the report, the transit connection was two months ahead:

Pushing things back, and some misdirection

The 9/19/11 report indicated that a resolution was expected in September:

Also, in slightly misleading language, it suggested that the mass transit project was "now on schedule" after being behind--even though the project earlier in the year had been ahead of schedule:

Concrete deficiency

The new document indicates that three separate concrete cylinders had defective concrete. The document does not explain what that means--whether the cylinders were not used, or simply to be measured again. Nor does it describe the size and function of the cylinders.

As the screenshot above indicates, the consultant stated, "we will await the results of the 56-day testing." That milestone would have been the end of June. However, no results have been mentioned.




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…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

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…