Skip to main content

Gilmartin says FCR once (when?) budgeted $12M for new subway entrance, which cost $73M

In Public-private partnerships key to infrastructure overhaul, Real Estate Weekly reported on a recent panel:
Maryanne Gilmartin, whose company Forest City Ratner built Barclays Center in Downtown Brooklyn and is in the process of building several residential buildings in Pacific Park nearby, admitted that even in the best of circumstances, the process of completing infrastructure in NYC can be an onerous task.
“Infrastructure is an ugly business in this town,” said Gilmartin. “It’s the iceberg; it’s not the 20 percent you see, it’s the 80 percent you don’t.”
When Forest City Ratner was constructing the Barclays Center, part of the plan included renovating a subway entrance in front of the arena, which they had budgeted $12 million for. When it was finally finished, after two years, they had spent $73 million.
“It took us two years to renovate the subway entrance, which is the same two years it took us to build a billion dollar arena,” said Gilmartin. “That’s the problem with infrastructure.”
(Emphasis added)

Wait a sec. First, the subway entrance is key to arena functioning, so it's not like the developer could have avoided proposing and executing this addition to the Atlantic Avenue/Barclays Center station. So it wasn't so much the public waiting for this "infrastructure overhaul" than a private entity expecting directed benefit.
Click to enlarge

Two years earlier, project budget near final sum

More importantly, though the article might leave the impression that the costs rocketed up from $12 million to $73 million over two years ending 9/28/12, when the arena opened, that's not so.

The screenshot at right is from a 6/10/10 report from a construction consultant to the arena bond trustee. By then, it indicates clearly that total project hard and soft costs neared $72 million.

Forest City may have budgeted $12 million for that subway entrance at some fuzzy previous time, but, then again, it estimated much lower sums for arena construction over the years.

The difference is that payments in lieu of taxes can pay off arena bonds, while infrastructure is tougher to pay for.

No wonder the arena was less of a financial success than the developer once presumed.

Comments