Former Forest City CEO Gilmartin: Atlantic Yards gave her too much PTSD to consider a return to the troubled project. She used to sound confident.

Former Forest City Ratner/Forest City New York CEO MaryAnne Gilmartin, who now heads her own firm MAG Partners, is definitely not ready to return to Brooklyn's troubled megaproject.

As the Real Deal reported Nov. 30, in an article focusing on Larry Silverstein's Innovation QNS project, Gilmartin commented on the foreclosure sale of six Atlantic Yards/Pacific Park development sites over the Vanderbilt Yard.

The indebtedness of Greenland USA, Forest City's successor in developing the project, is linked to the cost of a platform over the MTA's Vanderbilt Yard.

“You can wring the viability out of anything,” Gilmartin told an audience at NYU. 

Of course, the MTA accepted a lower cash bid from Forest City, which had the inside track because of the arena plan, for the railyard development rights, which presumed a platform and replacement railyard.

Would Gilmartin consider returning to the project, the moderator asked. (I think it's unclear who would do so, especially given the lack of clarity about the obligations.)

Gilmartinm according to the article's paraphrase, "responded that she still has too much PTSD from her years working on it."

Well, yes, there were a lot of challenges, setbacks, and criticisms.

Flashback, 2009

Let's recall a raucous public meeting in July 2009, as the project faced a relaxation of business terms to help Forest City.

Gilmartin, who took over helping Atlantic Yards in June 2007 after original point man Jim Stuckey departed mysteriously, spoke resolutely.

 “It is approaching half a decade since Forest City embarked on the Atlantic Yards project” she said, and after committing “hundreds of millions in equity invested and not a single new building built”—and, as we learned, gaining a not insignificant amount of subsidies—“our resolve is stronger than ever to build the project we committed to build early on: a world-class arena, thousands of new housing units, 2250 of which will be affordable, a new transit entrance, open space, a new railyard for the Long Island Rail Road.”

“Today, undeterred by an anemic economy and a relentless campaign of a few to delay the benefits to many,” she continued—in a bit of a hedge-- “Forest City stands committed to building the project as quickly as the market will allow.”

The ten-year construction schedule has not changed in terms of duration, she asserted. “It has simply been pushed out three years.”

The arena, she said, would be open for the 2011-12 basketball season—which was a year off. 

Also, of course, the construction schedule had not been "simply pushed out." 

“There is a ten-year timetable,” said state official Steve Matlin. “However, we need the capital markets, we need the residential markets to cooperate, so there is the possibility that the project will be delayed, beyond ten years." 

Indeed. Empire State Development, the state authority that oversees/shepherds the project, later gave the developers 25 years to build it.

Regarding the revised arena desugn, Gilmartin said, “Forest City is confident this is going to be a serious architectural statement.” She was right.

Flashback, 2010

Let's recall a February 2010 essay by Gilmartin in the Commercial Observer, The Op-Ed: Atlantic Yards—It Is Happening. 

I noted one contrast between that essay and a May 2008 Daily News op-ed by CEO Bruce Ratner.

Ratner had claimed the developer aimed to break ground on the Barclays Center later that year, and open both the arena and the first residential tower in 2010. "We anticipate finishing all of Atlantic Yards by 2018," he wrote. But Gilmartin offered no timetables.

Gilmartin wrote:

From the beginning, Atlantic Yards has been about much more than building a basketball arena. It has been about jobs and housing and an historic community-benefits agreement [CBA] that ensures that the project's economic and social benefits help the folks who live here and need it most. Even during booming economic times, Brooklyn as a borough has seen unequal resources and opportunities; it is a place where good jobs and affordable housing could make a genuine difference. Now, as the economy stumbles out of the worst recession in decades, they are more necessary than ever.

Except they never delivered on the CBA and refused to hire the required Independent Compliance Monitor.

She wrote:

For decades, the area surrounding and encompassing Atlantic Yards has remained a blighted part of the city. It has failed to attract the investment seen in other parts of the city and the borough.

Then why did Chuck Ratner, CEO of parent Forest City Enterprises, call it "a great piece of real estate"?

Why was there never any attempt to market the Vanderbilt Yard, which almost surely would have generated multiple bids, as with Willets Point or Hudson Yards?

Why are there million-dollar condos next door to the blighted railyard? Wouldn't a historic district literally adjacent to the site invite investment? There were spot rezonings for buildings like the Newswalk condos, but never a rezoning that would spur investment.

Gilmartin continued:

While opponents have depicted the 22-acre site as an oasis of brownstones and quaint streets, those who live or work in the area, or who have traveled to the site, know that while a few commercial businesses and residents have made the site their home, in 2006, more than 70 percent of the project area was occupied by empty lots, gas stations, underutilized or vacant manufacturing buildings and an 8-acre, below-grade LIRR rail yard, which since the early 1900s has divided the communities to the north and south of the site.

No one's depicted it as an oasis--it was a borderland, with some valuable, and potentiallyvaluable sites. And, by 2006, three years after Forest City Ratner announced the project, investment had been stalled.

The need for agility

In closing, Gilmartin wrote:

Development requires agility, the willingness and ability to respond to a changing environment. On Atlantic Yards, we've done that. We've been appropriately nimble, making necessary adjustments in light of changing markets and demands.

But we've done so without abandoning our principles or our commitment to the public good we and others expect from the project.

Those commitments were in doubt then, and even more so now.

More from her recent speech

According to the Real Deal, Gilmartin described the difficulty of financing two MAG Partners development sites in Manhattan, likening it to the challenge involving the Barclays Center.

Note: in a 2015 speech, Gilmartin suggested that it wasn't so hard to get the arena financed. 

While the New Jersey Nets were not an impressive basketball team and the project was complicated, "this was not about any of that," she said. "It was about 'Brand Brooklyn' and what it really meant was that you were building something in a place that had such deep demand, such deep capacity and such, you know, cultural richness that if you build it they would come."

"For us, it really was not about the arena, it was about the housing," Gilmartin continued in that speech. 

Which is why it's a little ironic that, in Dec. 10 Real Deal article Atlantic Yards at 20: Unfinished and facing foreclosure, Gilmartin said, "So the standout thing for me is the beauty, performance, and good neighborly aspect of Barclays Center.” (Those are all contested, but I'd agree that the arena did not cause the wide-ranging impacts some feared.)