Thursday, June 07, 2012

WSJ: Forest City gets MTA to accept start date on permanent railyard moved back 18 months; finished yard still due by September 2016

Developer Forest City Ratner, which successfully renegotiated the deal for Vanderbilt Yard development rights to build a smaller, cheaper replacement railyard and to attenuate payments, has managed to save cash flow by renegotiating another aspect of the schedule with the Metropolitan Transportation Authority, according to the Wall Street Journal.

By building the arena, Forest City Ratner had to move the railyard functions (storage and cleaning) to a smaller temporary yard east of the arena block, and to build a larger--though not as large as originally promised--upgraded yard by 9/1/16.

As the screenshot above indicates, construction of the larger yard was supposed to begin this June 30, as indicated in an MTA Staff Summary dated 6/22/09.

The Journal's Eliot Brown reports that the start date has been moved back 18 months to 12/31/13, with terms disclosed to the MTA board members this week.

(I'll update this if/when I get more details, but, at the very least, Forest City Ratner is saving on cash flow.)

Little changing?

The Journal reports::
Forest City spokesman Joseph DePlasco said the yard will still be completed on time. The developer has already built a portion of the yard, he said, and other related work will continue.
MTA spokesman Adam Lisberg said the developer has agreed to do $10 million of additional work in the interim, and the LIRR is using a temporary rail yard meanwhile.
"From our perspective, very little is changing here," Mr. Lisberg said.
Well, "very little" may be changing if Forest City meets that 9/1/16 deadline, but that becomes more tenuous if the start date gets moved back.

Or, if the deadline is met, how much disruptive late-night and overnight work will be necessary? Will this be part of the Supplementary Environmental Impact Statement required by the courts (which the state and FCR seek to appeal)?

Note that Forest City Ratner in 2005 agreed to build a nine-track yard that can accommodate 76 train cars but, with the 2009 renegotiation, got the MTA to agree to a seven-track yard holding 56 cars, valued at $147 million, perhaps $100 million less than the larger yard.

The temporary railyard has capacity for only 42 cars. It was once supposed to last 32 months after construction, but could last six years and eight months, or 80 months.

Drilling down

If the new railyard costs $147 million and would take four years and three months to build, a $10 million expenditure over 18 months represents a slowdown in progress. Then again, presumably Forest City has spent a portion of the overall cost already.

No comments:

Post a Comment