Thursday, February 18, 2016

Why the Prokhorov deal for the Barclays Center was likely premised on the Brooklyn Behemoth

B1 tower bulk from arena plaza would be piled onto Site 5
There's no proof, but I believe that Forest City Ratner--the junior part of Greenland Forest City Partners--had to be confident that the "Brooklyn Behemoth" office tower on Site 5 across from the Barclays Center would fly before closing the deal to sell the majority of the arena operating company to Mikhail Prokhorov.

In other words, Prokhorov only agreed to buy the arena (and the remaining piece of the Brooklyn Nets) when he was reasonably convinced--or misled--that the Atlantic Yards/Pacific Park developers would not build a 1.1 million square foot office tower (aka B1, formerly Miss Brooklyn)  over the arena plaza, which would severely disrupt arena operations and lower revenues.

The plaza, crucial as a safety valve for the arena, would stay, and the density from B1 would be piled on Site 5. For now, that means a preposterously large building, at least 1.5 million square feet, would be proposed for Site 5. It's nearly triple the bulk of the planned 1,066-foot supertall tower in Downtown Brooklyn.

Stay tuned to see how that proposal evolves--it's surely a gambit of sorts.

Surfacing in October and November

Let's consider the sequence. On 10/20/15, as I reported, Marion Phillips III of Empire State Development, the state authority overseeing/shepherding the project, said ESD had "some discussion" with Greenland Forest City Partners "about other possibilities related to" Site 5, currently home to Modell's and P.C. Richard, and approved for a 250-foot building with 439,050 square feet.

A new proposal, he said, would require a modification to the General Project Plan (GPP), including public hearings.

On 11/5/15, the real estate publication Bisnow published a brief:
Forest City Ratner EVP Kathryn Welch says FCR's getting ready to break ground on its "Site 5" project in Downtown Brooklyn, with plans for 1.6M SF of office and retail space, where she says the goal will be to bring in high-end retail like Brooklyn's never seen—something like the Time Warner Center, as she puts it.
After I questioned how that was possible, Forest City sent a note: "FYI, the BisNow piece was corrected since it mistakenly said all 1.6M would be on Site 5. That is what is allowed for the entire [B1 + Site 5] project."

That was not a mistake. Forest City told the truth, but didn't want it to be known.

The Prokhorov deal

The deal to sell the 55% of the arena operating company and 20% of the Brooklyn Nets owned and controlled by Forest City Enterprises was announced 12/22/15. From the Forest City press release:
"As we continue to focus our portfolio on core retail, office and apartment assets in strong urban markets, and transition to REIT status, this transaction is a significant milestone," said David J. LaRue, Forest City president and chief executive officer. "I want to thank the NBA for their support and I salute our New York team, led by Bruce Ratner, MaryAnne Gilmartin and David Berliner, as well as our partner and our associates and advisors involved in making this deal a reality."
That's boilerplate, but indeed they are focusing on their core assets now.

About B15

The "Brooklyn Behemoth" plan also put into context the rather shallow knowledge of architect Jonathan Marvel, who's designing the B15 tower just east of the Barclays Center and Sixth Avenue, between Dean and Pacific streets. That tower will contain a middle school.

As I wrote 12/10/15, Marvel didn't seem to know that, if and when the B1 tower is built to replace the temporary arena plaza, a main arena entrance will be relocated to the Sixth Avenue side of the arena, very close to the school.

That's because his client didn't tell him, and because his client had likely shelved the idea for B1.

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