Skip to main content

Featured Post

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

For consultants and law firms hired by state authority ESD, Atlantic Yards has delivered $50+ million, via the developers

Besides the $71,000 contract with AKRF regarding Site 5, which I described 11/6/20, the Atlantic Yards/Pacific Park project has generated an enormous amount of revenue, more than $50 million, for lawyers and consultants, all paid for by the developers.

That's a relatively small increase in recent years; as of 2016, as I reported, that total had approached $46 million, with some contracts starting as early as 2005 and 2006.

According to the project's guiding Development Agreement, the developers agree that, for themselves, affiliates and tenants, "all costs and expenses incurred by ESDC under this Agreement or the Project Documentation shall be for the account of, and shall be payable upon demand," by the developers. See excerpt below.

Some of the costs are operational--consultants to monitor the ongoing project--but most have to do with getting the project (and project changes) approved, and getting eminent domain accomplished. 

It's certainly good revenue for the consultants and law firms, and perhaps the cost of doing business for the developers. 

Whether it represents a wise expenditure--whether from the perspective of those who think it's enabling or those who think it's delaying--is another question. In 2008, architect and developer Vishaan Chakrabarti  piquantly called the $15 million spent on the Moynihan Station environmental revenue a "kind of workfare program for lawyers and consultants."

AKRF tab

AKRF itself had, as of 6/29/17 board materials, earned $7.4 million on a $7.7 million contract amount. That contract had been amended as of 5/12/14, and board materals explained:
The contract to date has been, and any amendment of the contract will be, funded in its entirety from an imprest account funded by the Project developer (affiliates of the Forest City Ratner companies; collectively “FCR”) and maintained by ESD.  

Note that that was just before the entrance of Greenland USA, now the project's majority owner. 

It may be that the new AKRF contract is separate from--and consecutive to--the previous one.

2017 totals



As of 2017, environmental monitor Henningson Durham & Richardson (HDR) and owner's representative STV had received most but not all of the contracts, $4.145 million and $5 million, respectively.

However, as indicated on p. 337 and 344 of the 3/26/20 ESD board materials here, the HDR contract has been increased to $5.645 million and the STV contract has been increased to $6.25 million.

No-upset (no limit) contracts

Three law firms have contracts through 12/31/25, which was once the expected--if not required--completion of the project, though it could now last another ten years, until 2035. And their earnings, according to the final page of the 6/25/20 ESD Board Materials, also excerpted at bottom, exceed the disbursements noted in the chart above.

These are so-called "no-upset" contracts, which do not have a cap, perhaps because the scope of work can't be as clearly bounded as that for other contracts.

Law firm Bryan Cave, which has a contract to represent ESDC on environmental and related litigation matters and to ensure ESDC's compliance with applicable environmental laws, has been paid $9,586,033.

Law firm Skadden Arps, which has a contract to represent ESDC on real estate and related litigation matters, as well as to assist in the negotiation and preparation of ground leases and other related matters, has been paid $11,677,670.

And law firm Berger and Webb, which provides legal services to ESDC for condemnation and related legal matters, has been paid $18,526,468. I'm not sure if the latter is related to a greater number of billable hours, or whether the firm gets some percentage related to the overall condemnation results.

Comments