FCR executive: state plans to deliver to judge study regarding (presumably minimal) impact of 25-year project buildout
At a Forest City Enterprises (FCE) quarterly earnings conference call today with investment analysts, company representative indicated that the Empire State Development Corporation (ESDC) does not plan to appeal Supreme Court Justice Marcy Friedman's 11/9/10 ruling that it had failed to consider the impact of a 25-year project buildout but instead would deliver a document that would make the problem go away.
(There were no questions about EB-5 financing.)
About the lawsuit
One analyst asked about the remaining Atlantic Yards lawsuit that "cropped up recently."
Joanne Minieri, President and COO of subsidiary Forest City Ratner, responded, "Right now, the opponents filed for a stay of the construction until the state complies with the judge's order to do a further study and to make new findings relating to the project buildout timeline."
"The state is complying with that order right now and work is well under way," she continued. "And, towards the end of the month, papers are due and a hearing is scheduled. But it's FC's, as well as the state's intention to comply with the order and do the study in connection with the timeline and the buildout. So, by the end of the month, there'll be a court hearing regarding this particular lawsuit."
"And no stay of construction in the meantime?" came the follow-up question.
"Correct," responded Minieri.
A hearing is scheduled for December 22. While Minieri did not characterize the study at hand, presumably the ESDC will deliver a document that does not delay the project or give project opponents any more ammunition.
AY timeline up to them
In an unintentional nod to that timetable issue, David LaRue, Chief Operating Officer of parent FCE at another juncture in the call indicated that the developer plans to move forward on Atlantic Yards--but only when the time is right.
"We're heavily invested in Atlantic Yards," he said. "We fully believe in the future of that opportunity, as a value-creating mechanism for us. The example of [FCR's] 80 DeKalb opening and leasing up in nine months to where I think it's 97 percent leased now... is just an indication of the strength and depth of that [Brooklyn] market. So, [CFO] Bob [O'Brien] mentioned earlier, we're going to look, I guess not offensively, but at the right time to develop those assets and take advantage of the entitlement we have."
In other words, as FCE said in November 2008, "We control the pace."
Contracted income for arena at 54%
LaRue said the company was continuing to seek new sponsors for the Barclays Center arena.
"We now have commitments for 54% of the contractually obligated income for the arena," he said. "We think of the contractually obligated income the same way we see pre-leasing at a retail center."
Three months ago, in September, the developer reported the figure was 51%:
FCE released EBTD (Earnings Before Taxes and Depreciation) Bridges regarding the third quarter and year-to-date.
Note how the divestment of the Nets, and the large share of losses, are helping.
FCE EBTD Bridge 3rd Q 2010
FCE EBDT Bridge 2010 YTD
(There were no questions about EB-5 financing.)
About the lawsuit
One analyst asked about the remaining Atlantic Yards lawsuit that "cropped up recently."
Joanne Minieri, President and COO of subsidiary Forest City Ratner, responded, "Right now, the opponents filed for a stay of the construction until the state complies with the judge's order to do a further study and to make new findings relating to the project buildout timeline."
"The state is complying with that order right now and work is well under way," she continued. "And, towards the end of the month, papers are due and a hearing is scheduled. But it's FC's, as well as the state's intention to comply with the order and do the study in connection with the timeline and the buildout. So, by the end of the month, there'll be a court hearing regarding this particular lawsuit."
"And no stay of construction in the meantime?" came the follow-up question.
"Correct," responded Minieri.
A hearing is scheduled for December 22. While Minieri did not characterize the study at hand, presumably the ESDC will deliver a document that does not delay the project or give project opponents any more ammunition.
AY timeline up to them
In an unintentional nod to that timetable issue, David LaRue, Chief Operating Officer of parent FCE at another juncture in the call indicated that the developer plans to move forward on Atlantic Yards--but only when the time is right.
"We're heavily invested in Atlantic Yards," he said. "We fully believe in the future of that opportunity, as a value-creating mechanism for us. The example of [FCR's] 80 DeKalb opening and leasing up in nine months to where I think it's 97 percent leased now... is just an indication of the strength and depth of that [Brooklyn] market. So, [CFO] Bob [O'Brien] mentioned earlier, we're going to look, I guess not offensively, but at the right time to develop those assets and take advantage of the entitlement we have."
In other words, as FCE said in November 2008, "We control the pace."
Contracted income for arena at 54%
LaRue said the company was continuing to seek new sponsors for the Barclays Center arena.
"We now have commitments for 54% of the contractually obligated income for the arena," he said. "We think of the contractually obligated income the same way we see pre-leasing at a retail center."
Three months ago, in September, the developer reported the figure was 51%:
To date, approximately 51 percent of forecast contractually obligated income for the arena is under contract. Contractually obligated income, which includes revenue from naming rights, sponsorships, suite licenses, Nets minimum rent, and food concession agreements, accounts for 72 percent of total pro-forma revenues for the arena.The EBTD Bridges
FCE released EBTD (Earnings Before Taxes and Depreciation) Bridges regarding the third quarter and year-to-date.
Note how the divestment of the Nets, and the large share of losses, are helping.
FCE EBTD Bridge 3rd Q 2010
FCE EBDT Bridge 2010 YTD
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