A first phase of staff cuts at Forest City Enterprises Inc. (NYSE: FCEA, B) eliminating 45 jobs at its Terminal Tower headquarters and six others nationally is underway.
Jeff Linton, spokesman for the national real estate developer and owner, said the cuts are part of the company’s effort to streamline processes as it restructures operations. Forest City plans to become a real estate investment trust early next year.
...In addition to the job reductions here, Forest City cut another five positions in New York City and one on the West Coast. ...
While Linton emphasized the structural nature of the corporate cuts, he acknowledged they are part of an effort to reduce costs in Forest City’s quest for better operating margins.
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…