Atlantic Yards/Pacific Park Report

Just in case Bruce Ratner's bio--which was apparently written in 2004--doesn't reappear on the revamped Forest City Ratner web site, here's a look at the old one, courtesy of the Internet Archive. The screen shot captures only part of the text, which is reproduced below.

BRUCE C. RATNER Chairman and Chief Executive Officer

Bruce C. Ratner is Chairman and Chief Executive Officer of Forest City Ratner Companies (FCRC). Under Mr. Ratner’s leadership, FCRC has become one of the foremost urban real estate developers in the New York metropolitan area.

After graduating cum laude from Harvard College in 1967 and receiving a law degree from Columbia University School of Law in 1970, Mr. Ratner joined the administration of Mayor John Lindsay as the director of a Model Cities program and later as the head of the Consumer Protection Division of the Department of Consumer Affairs. Following a four-year stint as a professor at New York University Law School, Mr. Ratner returned to gover…

The attendance at the last three New Jersey Nets home games has picked up considerably, with an announced crowd of 16,203 (81.1% of 19,968) on December 22, 16,852 (84.4%) last Friday, and a crowd of 18,786 (94.1%) last night.

Even if that's just tickets distributed rather than gate count, it's a return to some higher numbers posted earlier in the season and an increase from a previous average that nudged above 15,000.

Photos from last night indicate few empty seats, though those from Friday indicate a good number of cheap seats empty. Note that the announced attendance was 16,722 when the Nets hosted the Knicks December 10; I attended and estimated a 25% fudge factor.

Last year, attendance picked up around the holiday season, as well. But if the Nets sustain some increased attendance, despite the team's surprisingly bad home record (contrasted with its strength on the road), one factor might be the team's effort to distribute free or low-cost tickets.

In his now-traditional end-of-the-year interview with the Brooklyn Paper's Gersh Kuntzman, Borough President Marty Markowitz offers some curious comments on Atlantic Yards, notably the suggestion that project opponents missed an opportunity to compromise on a smaller project, and that the presence of a basketball team would draw corporations to Brooklyn.

Those, I submit, are "humble fictions," the counterpoint to Markowitz's catch-phrase, "in my humble opinion."

More soberly, he bows somewhat to reality by acknowledging that the project could take "12 to 16 years" to build. That's a distinct contrast with the approved ten-year construction timeline, which was reiterated by Forest City Ratner CEO Bruce Ratner this past May, but it doesn't acknowledge that the State Funding Agreement gives the developer 12+ years to build Phase 1 and imposes no deadline for Phase 2.

Markowitz also puts in a few words for the "mend-it-don't-end-it"…

When Morningstar recently said that Forest City Enterprises stock was likely worthless, it took several days--even after it was picked up by the Washington Post--for FCE to respond forcefully, plausibly stressing that the consensus of other financial analysts was that the stock should be a buy.

Since then, there's been some interesting criticism from an anonymous financial analyst commenting on Cleveland journalist Jill Miller Zimon's blog Writes Like She Talks.

Among the comments about analyst Matthew Coffina, who graduated Oberlin College in 2007 with an award in economics and is a Level 3 Chartered Financial Analyst candidate:
The kid, and I emphasize kid who wrote this article has very little experience as a securities analyst... and operates as a generalist i.e., he has no particular expertiese in the real estate industry....

FCE/A has said that Morningstar never contacted them. No analyst puts out work w/out talking to company, because quality of management is always a key f…

Some New Jersey Nets fans have become harsh critics of Chinese forward Yi Jianlian, whose performance has been inconsistent; a few even suggest marketing considerations trump basketball judgments.

Commented a fan self-described as JohnY (who's Chinese-American himself) on NetsDaily:
Yes, we are being forced to start Yi, by Ratner & co who thinks Yi is marketing the Nets to 200 million fans. right…

Guess which NYC developer bought the proverbial Brooklyn bridge from the Chinese?

Another commenter observed:
Yi hasn’t played to expectations nor will he. He is just there for marketing values get rid of him he’s not helping us; he is holding the team back.

Mixed incentives

Those assertions are tough to prove, of course, and Nets' basketball brass may be right in thinking Yi will be a success, even though, as fans point out, he doesn't get much fourth-quarter playing time these days.

Upon trading the established Richard Jefferson for Yi (and Bobby Simmons and cap space), princip…

A profile in the Newark Star-Ledger of New Jersey Nets CEO Brett Yormark, headlined Nets executive promotes New Jersey while selling Brooklyn, begins with the subject asserting he’s never read about P.T. Barnum, “the first great salesman/cajoler/marketer in American history.” Maybe that's a subtle sign that we should take what he says with a grain of salt.

The article, while offering much praise for Yormark’s hard work, salesmanship, and innovations, also addresses the challenges presented in the headline.

It also contains some very contradictory quotes from Yormark and me about who said what during a tour of Brooklyn I gave him before he was hired by the Nets.

From the article, it may seem impossible to arbitrate who’s right, but, as I contend (with backup evidence) below, in some places Yormark is either misremembering or simply not telling the truth.

(He hasn't been so good at predicting when the arena would open, has he?)

Watchdogging AY

I’ll reprint the section about hurdles fa…

Today the New York Times tells us that, according to the Urban Land Institute (ULI), nearly $5 billion in development projects in New York City have been delayed or canceled--meaning a virtually unchanged landscape for two years.

“There’s no way to finance a project,” the ULI's Stephen R. Blank told the newspaper. (Forest City Enterprises, btw, is active in the ULI.)

That suggests that Forest City Ratner's plan to get an arena started in 2009--or even 2010--is a long shot.

Union/contractor accord?

On Tuesday, Crain's New York Business broke the news, in an article headlined Construction unions may finance building projects:
Ed Malloy, President of the Building and Construction Trades Council, says the unions may put $100 million of pension fund money into a fund that would fund various construction projects. However, he said the unions would seek matching funds from the city and the state to create a fund of $300 million. A proposal will be sent to government officials next yea…

An expert on commercial property lending, in a letter published in yesterday's Wall Street Journal, suggests that commercial-property developers should be ashamed at asking for a federal bailout. Mike Offitt wrote, in part:
Unlike residential borrowers, most commercial landlords don't live in their buildings, and unless they are pleading stupidity, they understood perfectly, as did the lenders themselves, that the loans they were seeking from overeager conduit and securitization lenders were too generous. They decided to roll the dice and got rich with these cheap and easy funds. Now they are asking their formerly rich Uncle Sam to bail them out as their loans come due.

As the founder and former head of Deutsche Bank's commercial lending unit, and former senior trader of CMBS and commercial loans for Goldman, I am well aware of the perils of letting commercial-property borrowers fail: Either their lenders will have to extend them new terms, or they will face bankruptcies and…

Did architect Frank Gehry lay off two dozen staffers working on Atlantic Yards, as reported by the Wall Street Journal and the Daily News?

A commenter on the Brooklyn Paper's web site had a slightly different take:
El Sonrisas from Los Angeles says:
The layoffs were not exclusively of the team, most people from the Brooklyn team remain working for Gehry Partners. The layoffs were across all projects and all ranks. Most people from the Brooklyn project, whom still work at Gehry's, were simply relocated to other projects.

If that's true, it would be much easier for Gehry to reconstitute the team should the project get back on track (and he gets paid).

On Wednesday, December 24, WNYC radio's economic development reporter, Matthew Schuerman, was interviewed about Atlantic Yards at approximately 25:45 of Hour 2 of Morning Edition. While there wasn't much new for Atlantic Yards watchers, it was a decent summary of the issues and a reminder of the developer's over-optimistic plans, the government's limited leverage, and the question mark over the project's future.

The segment began with a quote from developer Bruce Ratner, who's rarely available to the media but appeared on WNYC's Brian Lehrer show in December 2003: "It will us take a year to go through the different processes and plans for the arena. And in about three to three and a half years, I hope to have an arena up and the start of some residential development."

That not-so-credible Arena 2006 plan has been pushed back again and again; when the project was approved in December 2006, the opening date was projected to be 2009, but now it's 2…

The New Jersey Nets are having Office Max help sponsor the holidays, in case you didn't notice. And forward, Yi Jianlian, of China, may be having an up-and-down season, but he wasn't named the NBA's ninth-most marketable player for nothing.

According to People's Daily, which apparently scooped the domestic press:
The Nets have entered into a multi-year sponsorship alliance with PEAK, a China-based company specializing in sports apparel production, including shoes, sportswear, and gear.

The announcement of the sponsorship was made at a press conference on Monday at the High Point Solutions Business Center at the IZOD CENTER, which was attended by PEAK general manager and executive director Xu Zhihua and Nets chief executive officer Brett Yormark. The press conference also included a performance by the Peking Opera and a fashion show, with PEAK models taking the ramp.

PEAK's sponsorship agreement with the Nets includes television visible courtside and baseline signage th…

A Cleveland Plain Dealer blog entry headlined Forest City fights back reported that Forest City Enterprises Inc. called Morningstar's analysis that the stock is worthless "was based on flawed assumptions and inaccurate interpretations of the company's debt obligations and its construction costs."

The Plain Dealer reported:
"We disagree in the strongest possible terms with Morningstar's opinion," spokesman Jeff Linton wrote in a statement. "Further, we are astonished and appalled that Morningstar would issue such an opinion without having made contact with Forest City."

Linton said no Morningstar representative has contacted or spoken to any senior-level executive at Forest City in two years... Five analysts who regularly cover Forest City have taken a neutral stance on the stock or expect it to perform slightly better than the market.

"We remain stable, with good liquidity and solid cash flow from our operations, and we have implemented a str…

Well, if attendance in the NBA is about tickets distributed, then gate count is about getting fans in the seats to buy concessions, not what they paid to get there, right?

So the Nets are giving tickets away. An announcement on Ticketmaster:
As part of the Nets Tickets on Us Program, you are receiving this one time, complimentary* ticket offer to see the Nets take on some of the NBA's best at the IZOD Center. Simply select one of the home games listed below and you can receive up to two tickets to the game. It's about taking a break and enjoying a night out, courtesy of the Nets.

Valid on tickets regularly priced at: $110 $80, $76, $40, $20, and $15.

Let's flash back to Alexandra Lange's 4/26/04 article in New York Magazine, headlined New Improved Brooklyn, subtitled "A glittering skyline, waterfront condos, new jobs, Frank Gehry buildings galore: Brooklyn is on the verge of a makeover even more extreme than you thought, re-creating itself in Manhattan’s image. What’s wrong with this picture?"

It's a fascinating look back, given the promises unfulfilled, and it even contains a hint that Forest City Ratner, despite public orders to the contrary, once planned to have Hugh Hardy, the architect of the developer's Atlantic Terminal mall and Court Street cinema complex, collaborate with Frank Gehry on Atlantic Yards.

The big rezonings

Lange wrote about Department of City Planning director Amanda Burden's plans to rezone Downtown Brooklyn and the Williamburg-Greenpoint waterfront:
Burden’s plans, enabled by two lengthy rezoning proposals, could add more than fifteen new towers, 4.5 million square feet of office …