Greenland Holding's huge loss on Atlantic Yards/Pacific Park: end-of-2023 audit shows firm recognized $390 million impairment (loss of value).
This is the first of three articles on Greenland USA finances related to Atlantic Yards/Pacific Park. The second concerned what Greenland paid Forest City in the 2018 ownership reshuffle, and what happened to Site 5. The third concerned Forest City's giving up its shares in the B4 tower and future Site 5 project.
An audit of Greenland Holding Group, the Shanghai-based parent of Greenland USA, indicates that, as of the end of 2023, the firm recognized an impairment--a loss in value--of nearly $391 million from its investment in Atlantic Yards/Pacific Park.
That indicates the impact of project delays and helps explain why there's been no revenue, or cushion, to pay back outstanding loans, now facing foreclosure, under the EB-5 investor visa program.
Though the impairment is substantial, it's little more than half of the $732 million in impairments, as detailed below, suffered by original developer Forest City Enterprises/Forest City Realty Trust on the project.
The new total comes from a machine translation of this 2023 audit report, by Daxin Certified Public Accountants, dated April 30, 2024, according to its URL. (I asked Greenland for comment on the numbers, but didn't hear back.)
Go to the 60th page of the PDF (marked p. 59), from which I've excerpted the original, below. I then put it through Google Translate. Atlantic Yards/Pacific Park is the last line.
The chart addresses Development Cost.
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From audit report |
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Looking more closely
Start Date: 2014
In the Greenland audit, go to the 217th page of the PDF, marked p. 216, for information on the overdue debt to EB-5 investors:
Among the current long-term loans of American Commercial Holdings (Pacific Park Project in New York), the EB-5 loans to AYB Funding 100, LLC and AYB Funding 200, LLC are due on June 30, 2023 (a total of US $285 million, valued at RMB 2 billion), and the loan collateral is the platform land and B5-B10 development rights. The lender officially initiated the asset disposal procedure in January 2024. After negotiation with the lender and a second extension, the deadline is currently extended to April 30, 2024. As of the reporting date, the Group has actively taken measures to deal with the risks brought about by the possible disposal of the asset.
Note that my calculation has been closer to $286 million, so either I'm slightly wrong or they're rounding off.
It's not clear what "measures to deal with the risks" have been taken.
Where the EB-5 money went
In a June 30, 2014 LLC agreement between Greenland and original developer Forest City, Greenland agreed to provide the joint venture with $250 million to help pay for the new railyard within the MTA's Vanderbilt Yard.However, it was possible to reduce that "Standby GL Credit Facility" by new financing under the EB-5 investor visa program.
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