Skip to main content

FCR says "overall schedule is fixed," but when will project be done: 2025? 2032? 2035?

Now that Atlantic Yards/Pacific Park faces unspecified delays, confessed earlier this month by Forest City Ratner's (FCR) parent Forest City Realty Trust (FCRT), when will the project get done? We don't know.

A Bloomberg article 11/17/16 about how FCR's market-rate rentals at 461 Dean face significant competition noted that parent Forest City Realty Trust took an accounting loss on the delayed Pacific Park project:
"We remain committed to bringing the entire project to completion, but there are a number of existing and near-term market factors that we must consider,” MaryAnne Gilmartin, CEO of Forest City Ratner, said in an e-mailed statement. Those include the new development supply, rising labor costs and the resolution of issues surrounding a New York affordable housing program, she said.
While the overall schedule is fixed, and we will meet it, there is flexibility in terms of individual buildings, especially given the amount of work underway,” she said.
(Emphasis added)

That is the same line that Gilmartin deputy Ashley Cotton used at a meeting last week. But she would not provide a specific timetable.

So we don't know what the overall schedule is.

Looking more closely: 2025? 2035?

Cotton also said that "the Greenland Forest City joint venture is fully committed to Pacific Park and our obligations under our government agreements," which means a new permanent railyard, a deck, and a May 2025 deadline for the project's affordable units, about 1,470 (out of 2,250) of which remain to be built. 

That deadline comes with $2,000/month fines for each unit not built--that's $1 million per month if there are 500 units outstanding--though that could be delayed if they invoke lack of subsidies. (Or, perhaps, there could be another renegotiation. After all, Atlantic Yards is a "never say never" project.) 

But even if the joint venture does build the 2,250 below-market units by 2025, that doesn't mean they have to finish all the commensurate 2,250 market-rate rentals and 1,930 condos (200 of which are supposed to be below-market) by then.

CFO Bob O'Brien of parent Forest City Realty Trust said in an 11/4/16 conference call with investment analysts that the firm's financial model "extends to 2035, 20 years from now."

As I wrote, that doesn't necessarily mean project completion by 2035, but it's a pretty strong clue that the project won't be finished by 2025.

The 2035 date may represent stabilization of income, but presumably that's two-to-five years after which the final building is constructed. 

The developer does have until 2035 before it defaults and would lose the right to develop the project.

Why 2032 might make sense

Another important date is June 1, 2030, which is when the last of 15 annual payments of about $11 million for Vanderbilt Yard development rights is due to the Metropolitan Transportation Authority.

According to the 6/22/09 MTA staff summary, when Forest City Ratner renegotiated its deal to buy those development rights, the payments have an implied interest rate of 6.5%, a gentle figure. That offers reason for the developer to wait, as long as other factors, including subsidies and the cost of construction, remain challenging.

From MTA Staff Summary
There is incentive to speed up payments: only such payments unlock each development parcel. But if they wait until June 1, 2030 to make that final payment, then start construction of the final tower, that suggests project completion no earlier than 2032.

It's all more complicated, though, since it's likely that market-rate and affordable units will be combined in several buildings, and the market for the former--currently tight--will fluctuate. If Forest City must meet that 2025 affordable housing deadline, then a good number of market-rate units must be built by then.

More details on plan for railyard development space

The 2014 Final Supplemental Environmental Impact Statement, Project Description, lays out the process:
• An FCRC affiliate is granted the right “from time to time” until June 1, 2031 [sic] to purchase any of the Air Space Subparcels, subject to certain conditions. One such condition is that FCRC has constructed the new LIRR rail yard in accordance with the Yard Relocation and Construction Agreement (which is discussed below).
• At the closing of such Air Space Subparcel, MTA is to deliver fee title to such Subparcel to a specified FCRC affiliate or its designee. It is anticipated that ESDC will be the designee, and will simultaneously lease such Air Space Subparcel to an affiliate of FCRC. The FCRC affiliate that has so acquired the Air Space Subparcel for the Project is granted the right to convey its rights in such Air Space Subparcel to another entity (such as a third-party developer) subject to certain conditions.
• The MTA may terminate FCRC’s right to acquire the Air Space Parcel if the new LIRR rail yard is not completed by 90 days after September 1, 2016, subject to certain extensions and payment of per diem fees.
Note that the June 1, 2031 date should be a year earlier, as far as I can tell. Also note that the deadline for the railyard has been extended to Dec. 1, 2017, and could be extended again.

Also from that Project Description:
• FCRC is obligated to have substantially completed construction of the entire platform within 25 years from the “Project Effective Date” (i.e., May 12, 2035), subject to specified force majeure and other provisions.


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 …

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

This graphic, posted in January 2018, is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. Note the unbuilt B1 and the proposed shift in bulk to the unbuilt Site 5.

The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change. The project is already well behind that tentative timetable.

How many people are expected?

Atlantic Yards/Pacific Park has a projected 6,430 apartments housing 2.1 persons per unit (as per Chapter 4 of the 2006 Final Environmental Impact Statement), which would mean 13,503 new residents, with 1,890 among them in low-income affordable rentals, and 2,835 in moderate- and middle-income affordable rentals.

That leaves 8,778 people in market-rate rentals and condos, though let's call it 8,358 after subtracting 420 who may live in 200 promised below-market condos. So that's 5,145 in below-market units, though many of them won't be so cheap.

As …

The passing of David Sheets, Dean Street renter, former Freddy's bartender, eminent domain plaintiff, and singular personality

David Sheets, longtime Dean Street renter, Freddy's bartender, eminent domain plaintiff, and singular personality, died 1/17/18 in HCA Greenview Hospital in Bowling Green, KY. He was 56.

There are obituary notices in the Bowling Green Daily News and the Wichita Eagle, which state:
He was born in Wichita, KS where he attended public Schools and Wichita State University. He lived for many years in Brooklyn, NY, and was employed as a legal assistant. David's hobby was cartography and had an avid interest in Mass Transit Systems of the world. David was predeceased by his father, Kenneth E. Sheets. He is survived by his mother, Wilma Smith, step-brother, Billy Ray Smith and his wife, Jane all of Bowling Green; step-sister, Ellen Smith Alexander and her husband, Jerry of Bella Vista, AR; several cousins and step-nieces and step-nephews also survive. Memorial Services will be on Monday, January 22, 2018 at 1:00 pm with visitation from 10:00 am to 1:00 pm Monday at Johnson-Vaughn-Phe…

Some skepticism on Belmont hockey deal: lease value seems far below Aqueduct racino; unclear (but large?) cost for LIRR service

As I wrote for The Bridge 12/20/1, The Islanders Say Bye to Brooklyn, But Where Next?, the press conference announcing a new arena at Belmont Park for the New York Islanders was "long on pomp... but short on specifics."

Notably, a lease valued at $40 million "upfront to lease up to 43 acres over 49 years... seems like a good deal on rent for the state-controlled property." Also, the Long Island Rail Road will expand service to Belmont.

That indicates public support for an arena widely described as "privately financed," but how much? We don't know yet, but some more details--or at least questions--have emerged.

An Aqueduct comparable?

Well, we don't know what the other bid was, and there aren't exactly parcels that large offering direct comparables.

But consider: Genting New York LLC in September 2010 was granted a franchise to operate a video lottery terminal under a 30 year lease on 67 acres at Aqueduct Park (as noted by Gov. Andrew Cuomo).


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 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…