Skip to main content

Ratner and Gilmartin appear to celebrate succession: union wages in modular factory "very, very appropriate"; Markowitz cites Brooklyn/FCR "love affair"

The always insightful and skeptical (not) Betty Liu of Bloomberg TV yesterday had an exclusive interview with Bruce Ratner and MaryAnne Gilmartin of Forest City Ratner, as the former--as had been in the works--stepped down as CEO but will remain as chairman.

Also note the over-the-top praise issued by Borough President Marty Markowitz:
Throughout his career, Bruce has dedicated himself to improving the lives of Brooklynites and New Yorkers—his vision and commitment to investing in our borough not only provided the lifeblood for Barclays Center, but was a driving force behind Brooklyn’s continued renaissance. I have every confidence that under the capable leadership of MaryAnne Gilmartin, the love affair between Brooklyn and Forest City Ratner will continue to grow and flourish.
From the TV interview

BL: "Bruce, you're a friend of this program... tell me the thinking behind you stepping aside as CEO for day-to-day operations?"

BR: "MaryAnne and I worked together for 18 years. we've done so much together. MaryAnne likes to say, and she 's right, we've finished each others sentences.... part of good leadership is establishing succession...."

BL: "You've worked almost two decades at Forest City Ratner... how are you going to take this company from here on out?"

MAG: "It's a pleasure to be here, a pleasure to be partner with Bruce. This is an exhilarating moment for me. What it really tells the world that women can do bricks and mortar... Women make good developers because it's problem solving, it's the great Rubik's cube of real estate. I'm proud to be part of a company that is known for doing great, creative work."

"You're 'leaning in,'" quipped the host, prompting satisfied laughs all around.

MAG: "We also have a portfolio, it shows that not only can women do real estate, they can drive operational excellence...I would not have taken the job had Bruce not agreed to be actively involved in day to day operations."

What's next: Atlantic Yards

BL: "What is next then for Forest City?"

MAG: "First of all, we are all about Atlantic Yards. 6400 units of housing... Over a million and a half people have passed through Barclays since it's opened. It's been an extraordinary success, and we're thrilled."

Gilmartin then noted that "there are 15" buildings, "predominantly housing, a large number of affordable units. So a priority of the company is to execute on the entitlements that we worked so hard to bring to bear at Atlantic Yards."

Actually, there are supposed to be 16 buildings, so it sounds like Gilmartin was either being careless or eliminating either the B1 office tower at the intersection of Atlantic and Flatbush avenues or, possibly, another tower.

What about modular?

Liu asked about the company's modular construction plans.

BR: "We think it has tremendous applications for a city like New York City.. holds costs down, fast, efficient, environmentally wonderful. MaryAnne has executed beautifully... You know exactly what your costs are... efficient, also very environmentally friendly. Most importantly is the cost element. Work in a factory, union wages are very, very appropriate both for the worker and for our company."

(Emphasis added)

Very, very appropriate is a euphemism for saving 25% on wages.

BL: "What kind of demand are you seeing?"

MAG: "Brooklyn is booming. I believe that, if we build it, they will come, so speed to market is a huge benefit of modular. The culture of the company... is really one that rewards creativity, it drives innovations.. we have the talent in house to do something in an industry that really doesn't innovate much... What makes modular so extraordinary is that it's such a grand departure from the way things have typically been done."

If Brooklyn is booming, then why won't Forest City build a deck over the Vanderbilt Yard before building on the Atlantic Yards parking lot?

Liu asked why others haven't done similarly?

BR: "It's not an innovative industry. Second thing, you need to have a pipeline of product... We've spent probably $10 million in the development of modular. a lot of research has gone into it. most companies don't have the time, interest, nor the pipeline... If you build one building and wait a couple of years, it doesn't make sense to put the time investment and the money investment. Because of Atlantic Yards, we can do that."

MAG: "We want to feed that factory... if you don't have the pipeline that Bruce mentioned, you can't feed that factory."

Nassau Coliseum

Liu mentioned that FCR's next project might be a Nassau Coliseum renovation.

BR: "Now that the Islanders are leaving, and I think it's' good for everybody, but that's a very old coliseum, an old arena, the idea, how do you make something... it's a great place, a really live place... we think Nassau Coliseum should be fixed up, made into a music venue, a sports venue."

Barclays Center

BL: "What's next for Barclays Center?"

MAG: "We've had a lot of volume and variety, i think it's really sustaining the excellence, in terms of food of any arena.. We need to keep up the very high bar. The employees, we have high employee satisfaction, they love working there... the great track record we started. And finally, to be a very good neighbor to the community in Brooklyn. There were lots of concerns about that. We worked very hard to make sure this was of the community and in the community, and we need to keep doing a very fine job in that area."

Note that there's also been significant turnover at the arena, and no health insurance for the approximately 1900 part-time workers. As for being a good neighbor, note regular complaints and incident reports on Atlantic Yards Watch, including several examples of bass leaking into the community.

And, of course, there's an ongoing process for a Supplemental Environmental Impact Statement regarding the state's failure to study the impact of a potential 25-year buildout, as opposed to the long-promised decade, or the 15 years the state finally studied.

In the press

Crain's New York Business reported yesterday, in NYC's newest real estate honcho vows innovation, that Forest City has ambitious outside Brooklyn, in Queens and the Lower East Side:
In addition, [Gilmartin] said she will also work to build up a new pipeline of development sites, particularly in Queens, and will work to make the Metrotech Center, a complex of office buildings Forest City Ratner began building along Flatbush Avenue in downtown Brooklyn in the late 1980s, appealing to technology and creative companies. Originally, it was pitched as ideal back office space for major Wall Street firms.
While many developers have focused on areas like Manhattan's far West Side, Ms. Gilmartin said she is looking to create new projects in Queens, though she declined to specify what neighborhoods she would focus on.
"The West Side is crowded," Ms. Gilmartin said. "I like the East Side and Queens." On Manhattan's Lower East Side, Forest City is expected to be among the companies submitting a bid to develop the big, long vacant Seward Park residential project.
In's Meadowlands Matters, John Brennan reported Bruce Ratner steps down from running Forest City Ratner, looks back at the Barclays Center saga
On the same morning that Bruce Ratner announced that he was stepping down as President and Chief Executive Officer of Forest City Ratner, he also sat down for the “Featured Interview” at the Street and Smith’s Sports Business Journal’s “Sports Facilities and Franchises ’13″ event at the Brooklyn Bridge Marriott.
(Note that they also went to the Nets' final game last night.)

Ratner, asked about whether the Islanders would move to the Barclays Center a year before the announced 2015-16 season, was evasive: “At this point, no” discussion.

Regarding hockey:
Ratner acknowledged that the arena can’t hold more than 14,500 – that will make it the smallest capacity in the NHL.
“There will be some adjustment, in terms of premium seating, but generally it will be like it is now,” Ratner said. “A positive is that the sight lines are extraordinary for hockey.”
The sight lines are not extraordinary everywhere, I'd bet.

Regarding community concerns:
Ratner has tended in the past to downplay the resistance level the team faced in the neighborhoods, but not as much on Wednesday.
“We had a lot of opposition for a long time,” Ratner said, adding that “a lot of people didn’t want it.” But he said that now, “Almost all people who live within a few blocks of the arena use it and love it.”
That should be taken with the same grain of salt required when Ratner said he "anticipated" completing Atlantic Yards in a decade.

Regarding the design:
As for the departure of renowned architect Frank Gehry, Ratner said that while that scrapped arena design was more expensive, “it wasn’t so much the cost, it was the complexity and size of it.”
“The most important thing was that the [Gehry] arena design required us to build four buildings around the arena, attached,” Ratner said. “But that was not financially or economically doable. When that happened, because of deadline problems we had with our bonds,” a new design was needed. Ratner added that a redesign of a Frank Gehry arena in a short time was “just not possible.”
Ratner says that the scaled-down version doesn’t leave him missing any element of the original, except maybe less storage space within the arena.
Yes, the four towers were tethered to the arena, but also the Gehry arena was 850,000 square feet, as opposed to 675,000 square feet. That's a big difference.

Marty Markowitz on Bruce Ratner and MaryAnne Gilmartin transition 4/17/03

From Forest City Enterprises web site
FCE announcement
Forest City Announces Leadership Transition at New York Subsidiary
MaryAnne Gilmartin Succeeds Bruce Ratner as President & CEO of Forest City Ratner Companies; Ratner to Serve as Executive Chairman

CLEVELAND, April 17, 2013 /PRNewswire/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced that MaryAnne Gilmartin, executive vice president of commercial and residential development, will succeed Bruce Ratner as president and chief executive officer of the company's Brooklyn-based subsidiary, Forest City Ratner Companies (FCRC). Ratner will serve as executive chairman of FCRC. The transition is part of the company's ongoing succession planning and is effective immediately.
"Under the leadership of Bruce Ratner, the New York metropolitan area has become our largest core market and a key component of our overall value-creation model," said David J. LaRue, Forest City Enterprises president and chief executive officer. "He has also built a great team of real estate professionals with expertise in development, operations and management. We are thrilled that MaryAnne Gilmartin will continue this legacy and assume day-to-day leadership of FCRC as president and CEO, and that Bruce will continue to play a key role as executive chairman. I look forward to working with both of them along with the rest of the New York team."
Gilmartin joined FCRC in 1994. During her 18-year tenure, she has played a pivotal role in a number of the company's most highly visible projects in the region, including Barclays Center arena, New York by Gehry at 8 Spruce Street and the New York Times Building. She began her career in real estate in 1986 as a New York City Urban Fellow at the Public Development Corporation.
Ratner founded FCRC in 1985 in partnership with Cleveland-based Forest City Enterprises. Under his leadership, FCRC became one of the most active real estate businesses in the New York metropolitan area, developing, owning and operating more than 40 office, retail, hotel, and residential projects, totaling approximately 15 million square feet. In 2006, FCRC became a wholly owned subsidiary of Forest City Enterprises.


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…