Atlantic Yards/Pacific Park Report

In the second harsh critique by activist hedge fund investors in months, Forest City Realty Trust yesterday was portrayed not only as underperforming relative to real estate peers, but self-victimized by "a tangled web of nepotism and self-dealing," and with the Bruce Ratner-led New York subsidiary, Forest City Ratner, as contributing by far the worst performance. The Stamford-based hedge fund, Land and Buildings Investment Management , revealed that it had unsuccessfully pushed for Forest City to open up its board and otherwise take measures to boost the stock price. It said that last month's decisions  to remove control by the extended Ratner family, thus collapsing the two-class stock structure and recasting the board to formally end family control, were insufficient. Land and Buildings publicly released its statement as a letter  (also at bottom) to shareholders. The Cleveland Plain Dealer reported that Forest City did not comment as of yesterday afternoon.  The

Bloomberg's Scott Soshnick yesterday published  Brooklyn’s Barclays Center Is Dumping the Islanders , with a conclusory headline hinted at--but not backed up by the text: After two years and countless complaints [AYR: most notably, I'd say, regarding the off-center seating, bad sightlines, and arena ice], Brooklyn’s Barclays Center has concluded it’s no longer worth it to host the New York Islanders. The arena, which is already home to the NBA’s Nets and one of the world’s top-grossing concert venues, would make more money without the National Hockey League team, according to people familiar with the facility’s financials. Russian billionaire Mikhail Prokhorov, who owns the building and the Nets, has since November been seeking an investor to take a stake in both. As of earlier this month, a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season -- a clear signal that the team won’t play there, the peo

This is the fourth of five articles based on the 1/24/17 Atlantic Yards/Pacific Park meeting. I previously wrote about the unclear timing of the project buildout, the  role of Greenland, and the impact of exterior events. At the meeting, I said that some two years ago community groups were selected for the ten low-cost community events at the Barclays Center promised in the Community Benefits Agreement (CBA), but it didn't seem to have launched. From DBNA web site 5/2/15 : Arena Related Programs" include "Community Events Program" "It definitely launched," said Roland Guevara, Barclays Center VP for Community Relations, adding that it's been somewhat slow because it's tough to find space in a busy schedule. How many such events, I asked, have been held? "I don’t have the number offhand, but I’ll get the number," he responded. That didn't happen. I spoke to Guevara afterward and said I'd email him the next morn

From the New York Post, quoting NHL commissioner Gary Bettman: “The owners are committed to the franchise, they’re committed to New York and the great fan base that has followed the Islanders,” Bettman said. “There are some issues about playing at Barclays, it may be fundamental to the ice system. That’s not something that can be fixed in the short term. “I think, as is prudent, Scott Malkin and Jon Ledecky are reviewing the situation and looking very seriously at what their options are.” The problem is that building a new arena is prohibitively expensive, so this is more likely a public joust to either get the building renovated or at least realign the deal with the Barclays Center. As Dan Saraceni of Lighthouse Hockey put it , it's "more of the same."

Update/correction January 2018: note that while sites were grandfathered in, the project as a whole had questions marks around it , so it would not have been prudent to build. OK, a red-carpet interview before an awards banquet is not exactly the same as a deposition under oath. But I do think Forest City Ratner CEO MaryAnne Gilmartin, who recently received a lifetime achievement award at the Real Estate Board of New York’s annual gala, wasn't fully candid about the return of the 421-a tax subsidy, now dubbed by Gov. Andrew Cuomo "Affordable New York." "Well, instantly it's going to allow Pacific Park Brooklyn to continue and for us to build it as quickly as possible," she said in an  interview  (below) with the Real Deal's Hiten Samtani. "Because without it, it would not be possible to meet the timeline, so that's critical." Maybe. But the Greenland Forest City Partners (GFCP) joint venture already has 421-a benefits locked in for tw

Newsday sports columnist Neil Best 1/26/17 wrote  With Nets and Islanders struggling, Barclays Center is having a winter of discontent , observing a "mostly young, mostly fashionable, ethnically and racially diverse" crowd on Pride Night--but not watching the Brooklyn Nets play the Miami Heat. Both the Nets and the New York Islanders are doing so badly it's likely the arena--for the first season--won't host any playoff games. The ever-spinning Brett Yormark, CEO of Brooklyn Sports & Entertainment, says the gate count--though he wouldn't share numbers to Best--is up 6 percent compared to last year for the Nets and down 2 percent for the Islanders. That's interesting. The announced attendance, meaning tickets distributed, is  15,442  for the Nets and  12,858  for the Islanders. Last season, it was  15,125  for the Nets and  13,626  for the Islanders. But actual gate count  last season, as disclosed in a report to potential bond buyers, was 1

Via NetsDaily If you check out the Twitter feed of the Long Island Nets, the home game photos look eerie: the stands in the Barclays Center--their home for one year, before they move to the revamped Nassau Coliseum--are empty. "Very strange watching @LongIslandNets play in empty Barclays," tweeted NetsDaily (aka "Net Income," or Bob Windrem) on 1/25/17, with the photo at right. That's not how it was supposed to be. On 11/20/16, NetsDaily reported  that there would be 22 afternoon games (of 24 home games) before Brooklyn Nets games, albeit with separate ticketing. Hopes dashed quickly With general admission seats at $15--that was the price for much-ballyhooed Brooklyn Nets discounts the first year!--team officials were hopeful. “There’s an opportunity for schools, there’s an opportunity for colleges, there’s an opportunity for folks who may do shift work to come to a game at 1:30 or noon or 2 o’clock,” team VP Alton Byrd told Newsday. That didn&

This is the third of a few articles based on the 1/24/17 Atlantic Yards/Pacific Park meeting. I previously wrote about the unclear timing of the project buildout and the role of Greenland. When the Barclays Center's new VP for Community Relations spoke, there was an echo of the 11/1/16 meeting in which neighbors complained about a noisy television shoot for which preparations began at 6 am on the arena plaza and Roland Guevara basically responded that it often "comes directed from the news channels themselves" and that he remembered feeling happy as a kid, "or even as an adult," seeing "something positive about going on" regarding his neighborhood. Of course, the arena's interests are not necessarily the neighborhood's interests, especially those who live there (as opposed to those who run restaurants and bars). "Some of the events hosted on the plaza are very disruptive to the community," commented Michelle, a regular at the

The Barclays Center hasn't circulated customized event calendars--with extra information for neighbors--since May 2016 , as shown  at the bottom. Part of that, perhaps, was attributable to a chance in personnel. On Tuesday, 1/24/17, however, the arena's new VP for Community Relations, Roland Guevara, circulated the February Community Notice pictured below. Note the "expected exterior impacts" regarding several circus performances and the UFC (Ultimate Fighting Championship) mixed martial arts (MMA) event on 2/11/17. While the message says "Please standby for more details," it's a good bet that such impacts include crowds gathering on the arena plaza, with merchandise sales and--at least for the UFC--perhaps some chanting or otherwise aggressive behavior. In contrast with previous event calendars circulated, it does not list non-ticketed events, though such listings do help with neighbors' planning about potential impacts. On Wednes

The Real Deal this morning published Madison International in talks to buy Forest City’s stake in NYC retail portfolio , based on an unnamed source. That means the fund manager, which in 2011 bought a 49% stake in the malls--like Atlantic Center and Atlantic Terminal--would own the entire portfolio outright. Last August, Forest City indicated it could put such retail buildings on sale. According to a 2011 New York Times interview with Madison International's Ronald Dickerman, "They came to us, I think, in September 2010 to fund their go-forward investments. You may know that the Atlantic Yards development is something like $4 billion." The malls were fully occupied and leased, he said. "We invest in core Class A assets where the building itself is relatively stable and the deal is not distressed. What’s distressed about the transaction is the fatigue of the underlying investor." So Forest City may be even more fatigued by now--as well as focusing its attenti

This is the second of a few articles based on the 1/24/17 Atlantic Yards/Pacific Park meeting. Yesterday I wrote about the unclear timing of the project buildout. A bit of tension emerged at the meeting over the role of Chinese investors and also the Shanghai-based Greenland Group, whose Greenland USA subsidiary owns 70% of the Atlantic Yards/Pacific Park project going forward (with the exception of the B2 tower, aka 461 Dean, and the Barclays Center operating company). In the joint venture Greenland Forest City Partners, Forest City Ratner has 30%. After Forest City Ratner's Ashley Cotton described Greenland as "a committed partner, they have financial wherewithal," Jimmy Greenfield, a Dean Street property owner, responded, "Greenland is a Chinese government-run corporation, so you don't meet the same--." "We're a publicly traded company," countered Scott Solish, Greenland USA's Project Manager, adding that they were excited about o

This is the first of a few articles based on the 1/24/17 Atlantic Yards/Pacific Park meeting. Three towers in the Atlantic Yards/Pacific Park project are either open or about to open. “We're in serious finishing-up-buildings mode,” said Forest City Ratner executive Ashley Cotton last night at the bi-monthly Quality of Life (formerly Community Update) meeting, held at 55 Hanson Place. But some details around them remain fuzzy, as do projections regarding the rest of the buildout. I asked if 2025--a date set in 2014 a deadline for the 2250 units of affordable housing, among 6,430 total apartments--remained a realistic date to complete the full project. Yes, replied Cotton. Despite what Forest City Realty Trust executives said in November—after disclosing unspecified delays—about the financial horizon for the project lasting to 2035? Yes, she said. That’s just not credible. My October 2016 annotation of an August 2014 tentative schedule 461 Dean (B2) Move-ins

OK, let's take a look at the top of the web site (screenshot below) for  38 Sixth Avenue , aka B3, at the southeast corner of the Barclays Center, with the entrance on Sixth Avenue just north of Dean Street: Conveniently situated amidst Brooklyn’s vibrant restaurants, shopping, and transportation  in a flourishing park setting , 38 Sixth sets a new standard. The thoughtfully designed floor plans range from studio apartments to spacious three-bedroom homes, rising 23 stories above the Arena. Each layout is spacious and flowing, affording ample sunlight and city views. (Emphasis added) What "flourishing park setting"? First, it's on the arena block. There isn't any "green space" programmed for that block park. See screenshot. So it can't be "situated" in anything remotely like a "flourishing park setting." October 2016 annotated timetable. 38 Sixth (B3) is at bottom right corner of the arena block. B15 has no public op

For a while, the 550 Vanderbilt web site has promised 2016 occupancy, as shown in the screenshot at right, but that didn't happen. So when might be building open? Last November, Forest City Realty Trust, parent of Forest City Ratner, which is the local component of the joint venture Greenland Forest City Partners, estimated that the building would be opening between the first and third quarters of 2017. That means it could start as late as March 31 but potentially sooner. According to the Department of Building's page , on 12/16/15 550 Vanderbilt got a 30-day Temporary Certificate of Occupancy (TCO) for four floors. And on 1/4/17, it got a second 30-day TCO , indicating that the first six floors could be occupied. That's at least 131 apartments, nearly half of the 278-unit building. So stay tuned. Perhaps we'll learn more at tomorrow's meeting .

In October 2016, after not seeing the monthly calendars from the Barclays Center that estimate the expected crowd for ticketed (and non-ticketed) events since May 2016, I posted  screenshots of ticketed arena events June through November. That omitted the non-ticketed events, which sometimes can be disruptive and surely should be announced publicly as well, with attendance estimates. We've been told such calendars will be issued, but until then here's a stopgap, with screenshots from the web site covering December through March of ticketed events. Non-ticketed events are absent, and more ticketed events should be added, Note that the last two days of December were blank, not by design, but because Kanye West canceled . Note that the Brooklyn Food and Wine Festival scheduled for Feb. 17-18 was postponed until an unspecified later date. And note that the chunk of events in late February and early March for the Ringling Bros. Circus will have to be filled in future years

REBNY in the Times So the Real Estate Board of New York (REBNY) held its annual banquet the other night, bestowing awards, and the real estate press was there to preview and take in the bonhomie. But perhaps the biggest sign of its clout was the budget to publish a 16-page special section in the New York Times on 1/19/17, complete with discreet praise for "Rebny's Tradition of Supporting Candidates" via "an independent expenditure committee," Jobs for New York, and advocacy to ensure that changes to the rules regarding EB-5 immigrant investor visas continue "to bring much-needed foreign investment to New York City projects and developments." Gilmartin steps up The  Commercial Observer quoted Chairman Rob Speyer about new members of the Executive Committee: “MaryAnne [Gilmartin], Jed [Walentas] and Marc [Holliday] will help REBNY fulfill its primary goal to fully engage and expand our membership. They are also involved in refining our policy a