Skip to main content

Forest City executive: AY lawsuits cleared by mid-2008

Could the planned Atlantic Yards arena (aka Barclays Center) open for the 2009-10 basketball season, as Forest City Ratner officially insists, even though the project is way behind schedule?

Well, officials from parent Forest City Enterprises (FCE) didn't assert an arena timeline yesterday during a conference call with investment analysts. However, when one executive predicted that legal cases challenging the project likely would persist through the midpoint of 2008, he again provided evidence that contradicts the company's stated timeline, which assumed that arena block would be flattened by now.

[Update 12/30/07: Forest City Enterprises ends its fiscal year in January, so the end of the first half of FY 08 would be July 31, 2008]

Without resolution of the Atlantic Yards legal cases--a pending challenge to the environmental review in state court, and a federal eminent domain appeal to be heard on October 9--certain buildings can't be demolished and/or construction can't go forward.

Could the cases be closed in less then ten months? That's not implausible, but it's not a lock, either. It implies success at the appeals court level for the defendants in both cases and (likely) no final appeals to the U.S. Supreme Court or the New York State Court of Appeals. So further legal delays could push the timeline back even more.

AY overview

Yesterday FCE's Bob O’Brien (right), Executive Vice President, Strategy and Investment Management, provided an overview of several projects, and got to Atlantic Yards at about 22:00 of the webcast:

We continue to move forward with our most visible and perhaps most ambitious project, Atlantic Yards. As we’ve indicated previously, we’ve acquired or controlled the vast majority of the land in Brooklyn necessary for this development. We’ve obtained all of the public approvals needed to proceed with this development. However, those approvals have been challenged in the courts. We are working with the support of the city and state and other interested public parties to defend and clear those lawsuits. We remain confident in our positions in all legal challenges and we are targeting resolution by the first half of fiscal year 2008.

Our long-term objective there is to build the Nets basketball team into a great franchise, relocate them to Brooklyn, a city of more than two-and-a-half million people, and develop a large-scale mixed-use project with the Nets and a Frank Gehry-designed arena as catalysts for the project and the further revitalization of downtown Brooklyn. Our commitment to build not only market-rate but also affordable housing as part of this development is one of the largest of its kind and addresses a significant housing shortfall for the people of New York.

(Emphasis added)

Long-term view

Forest City CEO Chuck Ratner (right), at about 32:00, again spoke about how the developer's long-term commitment to projects ultimately pays off. He cited MetroTech in Brooklyn as among several "ten to 20-year projects, and all had significant uncertainty in a time of significant risks," but worked out well for the company and investors.

He was not quite so candid as he was last March, when he acknowledged:
We are terrible, and we’ve been a developer for 50 years, on these big multi-use, public private urban developments, to be able to predict when it will go from idea to reality.

However, the timeline flexibility he mentioned again suggested that Atlantic Yards likely would not take ten years, as planned.

Office market

One investment analyst pointed out that Forest City seemed to be putting more emphasis on retail and housing. What's the outlook for office space?

The New York portion of that answer was turned over to Joanne Minieri (right), the Executive Vice President and Chief Operating Officer of Forest City Ratner in New York. Her answer, at about 43:45, contained enthusiastic words but was delivered in a less authoritative tone, perhaps given the current slowdown in the Brooklyn office market, and the cut in projected Atlantic Yards office space.

She commented:
We think it’s still a very strong office market, we continue to look for opportunities where they exist and as part of—some of the development in the Atlantic Yards project, there will also be some office opportunity there. Y’know, we’re very committed to the office development.

We believe New York is a strong market. We’re committed to the office business in the New York area. We’ll continue to look for opportunities to the extent they’re available. Land is difficult to find, but we keep our options open, and we’ll continue to produce that product here in the city.


Forest City Ratner has a considerable amount of land at Atlantic Yards for its office business. It just chose (for now) not to build office space, likely because housing is more lucrative and a switch from office space placated Assembly Speaker Sheldon Silver, who was concerned about competition with his Lower Manhattan district.

Moving cautiously

At about 47:50, Chuck Ratner talked about moving cautiously, and placed a special emphasis on Atlantic Yards:
As we’ve told you guys often, as a large developer, perhaps the more risky part of the real estate business, as opposed to acquisition, but the part where we think we can add more value, clearly you have to look to ways to moderate and manage your risks. And one of the ways we’ve learned that you manage and moderate your cost risks is by making sure you don’t start before you have complete plans and prices.

Particularly in a market with the kind of cost pressure that New York has and building a building with a signature architect like Frank Gehry, we’re being very cautious and careful that we know where we are before we start, and Joanne and her team have done a great job of managing this process.


Investor conference in NYC

On October 9, the same day the eminent domain appeal will be heard in federal court in New York, FCE will hold an "investor conference" during which analysts will get a closer look at the New York portfolio, including the site of the conference, the new Times Tower developed by Forest City Ratner along with the New York Times Company.

"It'll be a great day, an exciting day; you'll get to meet our New York team," said Chuck Ratner in closing the conference call yesterday.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlantic Yards/Pacific Park graphic: what's built/what might be coming (post-dated pinned post)

Click on graphic to enlarge. This is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change, and the project is already well behind that tentative timetable.


Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…