Sunday, May 19, 2013

So, is Atlantic Yards a wise example of cost-cutting (as per Observer)? Not exactly, since new arena cost not much off Gehry-era projections

The 5/14/13 New York Observer's article, PATH/Fail: The Story of the World’s Most Expensive Train Station, addresses the endless cost overruns in the Lower Manhattan project and presents a purported counterpoint:
In the private sector, these things often turn out differently. Atlantic Yards in Brooklyn is one example. Despite Bruce Ratner’s “man crush” on Frank Gehry, in the words of one of his employees, and the nearly $100 million in fees that he paid for the design of the undulating apartment towers and stadium, Mr. Ratner didn’t hesitate to drop the starchitect from Atlantic Yards when the costs got too high—costs that were partly the result of Mr. Gehry’s insistence on designing the interior elements down to minute details like the stadium seats, something that should sound familiar to the Port Authority.
While it's quite possible Ratner would have paid Gehry $100 million for the entire project, I highly doubt Gehry took in $100 million.

Looking more closely

More importantly, Gehry was not dropped mainly because of his fees, or because of his desire to design interiors. The arena was once supposed to be 850,000 square feet, and could've accommodated hockey and basketball equally. It was downsized to 675,000 square feet, and focused on basketball.

Yes, the arena got smaller and thus less expensive. But also significant was Ratner's need to decouple the arena from the four towers planned around it. Once Ratner recognized he couldn't finance and build those towers simultaneously as originally planned, there was no need for all the buildings to share mechanicals with the arena.

Also, the growth in cost of the arena was attributable in part--though not in whole--to the overall growth in construction costs. The entire project went from $2.5 billion to a projected $4.9 billion.

A "billion-dollar arena"?

Gehry's arena was initially $435 million in 2003, then $637.2 million at approval in 2006, and then $950 million in 2008. One factor: the cost of glass needed for security.

So, they shrunk the arena and what do they have? A "billion-dollar arena." Forest City executives call it a $934 million project, which "covers the cost of this building, the transit connection, the site work, etc." Construction of the arena itself cost

As I've written, documents cite $617.3 million in hard costs for arena and transit connection construction, and $192.85 million for soft costs, plus $34.7 million in additional costs. That's nearly $845 million.

How do they get to $934 million? Unclear.

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