During a conference call yesterday with investment analysis, Forest City Realty Trust executives were asked if an apparent agreement to reinstate--not quite; it's pending--the 421-a tax break "changes your view on the potential sale of your interest in Pacific Park or the timing of potential starts there"?
David LaRue, CEO of FCRT, did not say anything about the potential sale of the company's interest. (Note that three development sites are up for sale. I don't know if the question related to that announced sales effort or, as it seemed, the potential for Forest City to exit Pacific Park on a greater scale.)
LaRue said 421-a "is a very important component for any residential developer... especially if you're going to build any level of affordability into the building."
"We don't decide to go forward with buildings just based on 421-a, that helps," he continued. "But I think, as we look at where the market today.... there's still a big supply coming into the market through the balance of this year and into '18." (Indeed, that's part of why 550 Vanderbilt sales have gone more slowly than hoped.)
LaRue said 421-a "is a very important component for any residential developer... especially if you're going to build any level of affordability into the building."
"We don't decide to go forward with buildings just based on 421-a, that helps," he continued. "But I think, as we look at where the market today.... there's still a big supply coming into the market through the balance of this year and into '18." (Indeed, that's part of why 550 Vanderbilt sales have gone more slowly than hoped.)
So they'll not only evaluate what tax break gets approved, he said, but also the market absorption and impact of the additional supply "before we make a capital allocation."
Last November, the developer cited not just 421-a uncertainty but competing supply and increasing construction costs as reasons for project delays.
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