Friday, December 13, 2013

For Forest City Ratner, modular press conference mostly a win, as questions about B2 ignored, company losses downplayed (and where's the Times?)

Developer Forest City Ratner, planning its press conference about modular housing yesterday just days after its parent company reported major paper losses on Atlantic Yards, had to be happy with the news coverage.

That coverage--albeit missing the New York Times and New York Post--mostly downplayed the losses and stuck with the narrative of innovation, which is an understandable component but incomplete treatment of the story.

So that meant no questions about the first tower (compensation of workers? affordability of apartments? overnight construction noise?).

Photo from Brooklyn Daily Eagle
Nor questions about other aspects of Atlantic Yards (missing Independent Compliance Monitorcontinued bass leakage from the arena, lingering Supplemental Environmental Impact Statement, court-ordered payment of attorneys' fees, parking/idling problems around the arena).

Here's video coverage of the first delivery and first modular hoist--the latter before the actual press conference yesterday.

In the Daily News

The New York Daily News, which presaged its coverage with, natch, an enthusiastic editorial, offered Developer Forest City Ratner hoists first modules of prefabricated apartment towers into place at Atlantic Yards: Tower will be tallest modular building in the world when completed.

It began:
Team Ratner went 1-1 at Atlantic Yards this week.
Developer Forest City Ratner hoisted the first modules of its prefabricated apartment tower into place on Wednesday at the corner of Flatbush Ave. and Dean St.
When the 363-unit B2 is completed next year, it will be the tallest modular building in the world, at 322 feet.
But looming over the tower was the disclosure Monday that the project is proving to be far less valuable than Forest City had hoped.
Executives at Forest City’s parent company in Cleveland disclosed that they were taking a $250 million to $350 million write-down on the $4.9 billion, 22-acre development.
Forest City has invested $500 million in the project so far, meaning it has essentially cut its value in half.
...In some ways the rising tower is to blame for the devaluation of the project.
LaRue pointed to delays in construction, including technical and legal challenges, and a commitment to making 30% of the site affordable, as reasons for the write-down.
My comment:
Team Ratner may have gone 1-1 at Atlantic Yards, but doncha think they're happy with the headline and photo here? After all, the news regarding the project's finances surely merited a standalone article.
I'd add that it's a bit conclusory to blame the tower for the devaluation, since we don't know exactly where Forest City's costs have risen, and how they deviate from estimates. Also, Forest City does get a 5% development fee, or nearly $250 million over the life of the project.

In Crain's

Crain's New York Business offered Finally, the pieces fall into place at Atlantic Yards: Almost a year after breaking ground for the first of 16 planned modular apartment towers, developer Forest City Ratner hopes to hoist the first piece into place on Thursday:
...“We’re developing a system that allows us to take prefabrication, which offers better quality control and faster construction, and bring that into an urban environment,” said Melissa Burch, executive vice president and director of residential and commercial construction at Forest City.
...Bruce Ratner, chairman of Forest City, had long eyed modular construction as a cost-saving measure, and in the weeks before Thursday’s milestone the firm and its Cleveland-based parent company Forest City Enterprises have been making several headlines on the financial side of the project.
This week in a filing with the Securities and Exchange Commission, Forest City Enterprises valued the entire Atlantic Yards project at about half of the $500 million it initially invested in the development, though in a statement Monday it pledged to investors to forge ahead despite ongoing costs.
...B2, as the first tower is known, will contain 181 units of affordable housing.
In the Wall Street Journal

The Wall Street Journal presented Modular Units Mount Up at Atlantic Yards: Long-Delayed Residential Project Begins to Take Shape, with some news about timing for the next tower.
Forest City broke ground on the tower last year and built the foundation. Now it expects to install the modules—which come outfitted even with towel racks—at a rate of eight a day. The unfinished building—which will have a total of 930 modules—isn't yet hooked up to water or electricity, so the "mods" aren't quite yet livable on a chilly winter night.
...Forest City, a unit of Forest City Enterprises Inc., expects to break ground on a second tower within a year, according to [Forest City's EVP] Mr. [Bob] Sanna.
He said the company hopes to use modular construction on future buildings, which he expects to go more quickly now that they have had the chance to work out some of the kinks.
"Many of the things that we're doing are the very first time," according to Mr. Sanna. "It's not unlike the first cellular phones [that] were big and awkward."
In the New York Observer

The New York Observer wrote Very à la Mod: Atlantic Yards Places First Modular Units for B2 Tower:
Reporters, PR men and honchos from Forest City Ratner and modular manufacturer Skanska gathered today in the cold and considerable shadow of Barclay’s [sic] Center to witness the hoisting into place of the first of the modular units in Atlantic Yards’ B2 residential tower, which aims to become the world’s tallest modular building upon its completion, slated for late next year. Of the tower’s 363 units, 181 will qualify as affordable housing—a considerable figure in terms of both quantity and percentage, particularly in comparison to prevailing proportions of market rate/affordable units included in new city construction.
The building schedule called today for the placement of three adjacent “mods,” Skanska’s Elizabeth Miller told The Observer, which together will compose a single apartment. Appliances, fixtures and plumbing had already been installed; all that remained to make the habitat functional was to tie into the building’s central electrical and water lines, which have yet to arrive. No word was forthcoming on hether the apartment assembled today might be one of those destined for affordable rental rates.
...Shortly after 1 p.m., Bruce Ratner arrived on the scene, hatted against sub-freezing temperatures, and high above, seated in a crane of fire-engine red, an operator prepared for action. Minutes earlier, construction workers had climbed atop the mod in question (another had been slotted in ahead of the media’s arrival), to tighten lengths of chain and the mod—a rectangular, 15-ton affair roughly resembling a shipping containing—hovered and swayed just above the ground.
My comment:
Um, your enthusiasm for the affordable housing might be contextualized by acknowledging how it fails to meet the promises in the Atlantic Yards Affordable Housing Memorandum of Understanding.
The MOU promised that 50% of the subsidized units, in floor area, would be family-sized units, 2BR and 3BR. This first building falls way short, with no 3BR units and relatively few 2BR ones. Moreover, the 2BR subsidized units are skewed toward the middle-income cohort, with the largest number of units renting for $2740.
http://atlanticyardsreport.blogspot.com/2013/11/average-affordable-2-br-in-first.html
Is that what ACORN brought its members to hearings to cheer for?
Photo via Brooklyn Daily Eagle
The Brooklyn Eagle, Brooklyn Paper, and DNAinfo

The Brooklyn Eagle offered a ton of photos and videos and a bit of text, in Finally! World's largest mod building lands in Atlantic Yards.

At right are Forest City Ratner CEO MaryAnne Gilmartin, Chairman Ratner, and Sanna.

The Brooklyn Paper injected a note of skepticism in  Box fort: Atlantic Yards tower gets first building blocks:
“Unfortunately, for people in this economy, [the module construction] is not great for labor,” said Rich Sullivan, a member of the anti-Atlantic Yards group Develop Don’t Destroy Brooklyn and resident of nearby Saint Marks Avenue. “It cuts down on the amount of people who will be working on the project.”
The workers fabricating the apartment-in-a-box units in a Navy Yard factory are all union, but so far there are only 72 of them despite an earlier Forest City pledge to employ 125, according to the magazine Fast Company.
Actually, the number of workers in the factory is rising, but that's not the key comparison; the issue is how work hours, compensation, and income tax revenue compare to what was once promised/estimated.

A preview yesterday in DNAinfo was headlined World's Tallest Prefab Building Leads NYC's Boom in Modular Housing:
BROOKLYN — Trucks are expected to arrive at the Atlantic Yards Thursday carrying the first modules of what will become the tallest prefabricated building in the world.
Coming from a factory at the Brooklyn Navy Yard, the roughly 930 steel-framed boxes are the basic building blocks for Forest City Ratner’s B2, an eco-friendly, 32-story tower with 363 rental units, half of which will be reserved for low, moderate and middle-income families.
B2, which is expected to open in December 2014, is just one of many high-profile prefab projects rolling into the city.
Many local developers are seizing on modular housing as a way to get projects completed more quickly and efficiently. A shorter construction window means tenants can move in faster, which helps cut financing costs and reduces the impact on neighbors because there’s less noise, dust and debris.

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