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

Chinese developers (including Greenland) facing domestic hazards from "unearned revenue"; a ripple effect in Brooklyn?

The Wall Street Journal's Mike Bird, who last month advised investors to sell Greenland Holdings Corp. (parent of Greenland USA) given red flags like high "unearned revenue"--properties bought by customers but not yet delivered--has issued another warning.

His 9/19/19 article, Chinese Property Giants Could Regret Milking the Country's Middle Class, doesn't mention Greenland, but certainly includes the the company (as he confirmed on Twitter), citing the "politically sensitive liability" of such unearned revenue from presales as representing "a greater share of the 10 largest property developers' liabilities than total debt."

It would be difficult, indeed, to sell out years before construction completion in New York (though such pre-sales do occur).

Bird cites a trend in China, since 2016, of a significant divergence: construction completions have slowed, while presales have grown. That leaves "developers vulnerable to a downturn in demand—or, more likely, a regulatory clampdown" as the government forces them to meet their obligations.

And in Brooklyn?

What does that mean to Greenland in Brooklyn? Unclear, but it's another sign of the giant company's financial challenges, and a reason why it might be interested in marketing more Atlantic Yards/Pacific Park parcels to raise cash, rather than fronting or borrowing the money itself.

The looming question, especially given Greenland's opacity about its timetable and plans in Brooklyn, is whether and when it might decide to pack up.

First, it has an obligation to deliver 2,250 affordable housing units by 2025, a deadline that has provoked doubts (but might be met).

Its embedded infrastructure investment, as well as the obligation to pay annually for railyard development rights--in fifteen annual installments of approximately $11 million each beginning on June 1, 2016--certainly provide reason to stay.

On the other hand, a significant amount of infrastructure investment seems yet to come, especially for the platform needed for the three towers over the eastern block of the railyard, and then the heart of the project's open space, which relies significantly on demapped Pacific Street between Carlton and Vanderbilt avenues.

Surely someone's doing the math. And given that Greenland likely has no future plans in Brooklyn, as opposed to its ongoing businesses in China, it would be politically much less fraught to disengage here. All that, of course, is speculation, but speculation fills the gap when a project like this needs more sunlight.

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