Skip to main content

Hello Brooklyn: In press release announcing expected joint venture with Forest City, Chinese investor Greenland takes a page from the Nets

As expected, Forest City Ratner and the Greenland Group closed on the promised joint venture to build the rest of Atlantic Yards, excluding the arena and first tower.

Notably it mentions future "commercial high-rise development," which means they do expect to build an office tower someday.

Unmentioned in the press release: Greenland is paying Forest City $200 million for a 70% share after the developer invested more than $500 million, which has led Forest City to announce an impairment of $242.4 million or $148.4 million net of tax

The decline in value results from factors including "construction timing and costs, expected future rents and operating expenses from the vertical development, holding periods, cash proceeds at the end of the estimated holding period."

The press release:
Forest City and Greenland Group Close on Joint Venture at Atlantic Yards in Brooklyn
CLEVELAND, BROOKLYN, N.Y. and SHANGHAI, July 1, 2014 /PRNewswire/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) and Greenland USA, a subsidiary of Shanghai-based Greenland Group Co., today announced that they have closed on a joint venture to develop Atlantic Yards, a 22-acre residential and commercial real estate project in Brooklyn. The two companies had announced the execution of a definitive agreement for the joint venture in mid-December 2013.
The joint venture covers both phase one and phase two of the project – excluding Barclays Center and the first residential tower, B2 BKLYN – including infrastructure, a permanent MTA rail yard, a platform above the rail yard, future residential units and future commercial high-rise development. The Committee on Foreign Investment in the United States (CFIUS) as well as the government of China have approved the joint venture.
Under the joint venture agreement, Greenland USA has acquired 70 percent of the project and will co-develop the project with Forest City, with both organizations sharing in all project costs going forward in proportion to their ownership interests. In addition, Greenland USA will make a capital contribution to reimburse Forest City for certain costs incurred to date. Forest City, through its New York-based subsidiary, Forest City Ratner Companies (FCRC) in partnership withGreenland USA, will co-manage day-to-day activities and will develop the project consistently with the approved master plan.
David J. LaRue, Forest City President and CEO, said, "We welcome our new partners to Brooklyn and look forward to working with them to deliver this very important project to market. We have always believed strongly in Brooklyn and New York City and greatly appreciate Greenland's shared vision for Atlantic Yards and on-going development in the borough. In particular, we look forward to expediting the construction of the housing component of Atlantic Yards, something that will benefit significantly from this new investment."
Zhang Yuliang, Chairman and President of Greenland Group, said, "As a company, we believe in a shared sense of community. We're very excited to join Forest City in Brooklyn. Together, we're confident we can expedite the construction of Atlantic Yards and build a new community within this extraordinary borough. New York City, like many great urban areas, is working diligently to create housing for a diverse group of people. This is something that we are excited to be part of. We are confident that Atlantic Yards will become a world-class example of how to build housing for a wide-range of people, building on the history of New York as a place of promise for all."
Bruce C. Ratner, Executive Chairman of FCRC said, "We are so proud to welcome Greenland USA as our partner for Atlantic Yards. Their commitment to the project – and to Brooklyn – was clear from day one. They have already been great in their willingness to close on this important partnership in a record period of time, recognizing that together we can bring the promise of Atlantic Yards to market faster and more efficiently. As I said earlier, Greenland's interest and willingness to make this investment is an extraordinary vote of confidence in our City and State and we look forward to working with them as we bring Atlantic Yards to completion, especially the 6,430 units of housing, including 2,250 units of affordable housing."
Jin Xu, First Executive Vice President of Greenland Group, said, "Atlantic Yards is an exciting project that will transform its surroundings and create a beautiful community. The partnership between Greenland Group and Forest City, although not official until this point, has already worked tirelessly on putting together the joint venture and planning the next steps of the project. I have no doubt that this strong effort and eagerness to create an unparalleled development will continue and will allow for the fulfillment of this goal."

Atlantic Yards is Greenland's second project in the United States. Last summer, Greenland purchased the largest remaining development site in downtown Los Angeles and plans to build a high-rise hotel and three high-rise residential towers. The Shanghai-based developer is the number one multiple-function real estate developer in China, with projects in more than 80 cities in 29 provinces in China. Greenland Group is respected in particular for developing well designed, high-rise buildings that are part of large urban complexes built around transit and high-speed rail. Four of their 23 ultra-high-rise buildings currently under construction are among the ten tallest buildings in the world.
In 2012, Greenland Group ranked 359th among Fortune Magazine's list of the Top 500 global enterprises, 73rd among Top 500 Chinese companies, and number one among Chinese real estate enterprises. It achieved revenues of $36.6 billion and a total profit of approximately $2 billion in 2012.
MaryAnne Gilmartin, President and CEO of FCRC, said, "I applaud Chairman Zhang Yuliang, Jin Xu and Ifei Chang for their willingness to work many hours over a very short period of time to finalize this partnership. Their eagerness to get to work has set a new standard of excellence for all of us. I look forward to working with them and their talented colleagues. They have shown repeatedly that they are innovative, design focused and understand infrastructure and vertical construction, values that we share at Forest City."
Ifei Chang, President and CEO of Greenland USA, said, "We fully anticipate that Atlantic Yards will shine a light on how to build a wide-range of housing for people of many different economic backgrounds. New York City, like other great urban areas, was always able to thrive because it was a magnet for young and old, native and foreign born, and a place where all could pursue their dreams. We intend to build a community where that ideal is alive every day. We thank Forest City for this great opportunity and say, 'Hello Brooklyn!"
That phrase, of course, was part of the pitch for the Brooklyn Nets.




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…

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…

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…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

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…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…