Atlantic Yards/Pacific Park Report

The Cleveland Plain Dealer, hometown paper of Forest City Enterprises, today offers a Q&A headlined Charles Ratner, president and CEO of Forest City Enterprises Inc.: Talk With the Boss . The relevant section for Atlantic Yards watchers, is this: The Question: What other key lessons have you learned? The Answer: Perhaps the lessons that I've learned are best described by the core values that we have worked to develop and celebrate at our company. First among those is integrity. I guess what I've learned, as much as anything, is what goes around comes around, as they say. It's extremely important to conduct yourself with a sense of your own integrity, and then make sure that there's organizational integrity, institutional integrity. The second is openness and candor. I think much of what we've seen recently, in the world both of public and private enterprise, is that that openness is often compromised. People are afraid to deliver bad news. There are always c...

Looking back, one of the most telling episodes in the Atlantic Yards saga came in a 4/2/08 earnings conference call that Forest City Enterprises (FCE) held with investment analysis. As I wrote , in response to a question from analyst Rich Moore, FCE Chuck Ratner expressed satisfaction in the developer’s relationship with local government, and said he expects more subsidy. Forest City Ratner, FCE's New York subsidiary, had gained $105 million in subsidy on top of the initial pledged $200 million, at the time of the call. Since then, FCR gained (beyond other stated subsidies and tax breaks): a speed-up in delivery of pledged state and city subsidies an additional $31 million for land purchase (allegedly from infrastructure funds) a revised deal with the Metropolitan Transportation Authority for the Vanderbilt Yard, with only $20 million down (instead of $100 million), a smaller permanent yard, and a generous 6.5% interest rate a Development Agreement with gentle penalties and g...

The estimates of permanent jobs at the Atlantic Yards project have always been fantasies. Remember the estimate of 10,000 jobs--the one that "enervated" Sen. Charles Schumer? It was bogus from the start . There was no market for that many office jobs. Forest City Ratner overstated the number of jobs that could fit in the four office towers projected to ring the arena. And it neglected to explain that most of the jobs would not be new but transferred from Manhattan. (Graphic from 2004 FCR flier . Click on all graphics to enlarge.) But the latest projection of 8000 jobs (below), from Forest City Ratner and parent Forest City Enterprises ( press release , letter to the Washington Post ), is even more outrageous. First, it's double the current official estimate (which itself is questionable) from the Empire State Development Corporation (ESDC). Also, it's based on 2006 data--which even back then was doubtful--regarding two or three more office towers than the one current...

After Chuck Ratner responded to George Will in the Washington Post, Develop Don't Destroy Brooklyn spokesman Daniel Goldstein gets a rebuttal letter in today's Post. It's longer and more substantive than the only letter Goldstein's seen published in the New York Times, which, rather than print a correction, let Goldstein on 4/12/07 explain that "[o]ur organization does not merely oppose the scale of the plan." In the Washington Post The headline is Seeking N.Y. land, developer twisted meaning of 'blight' : George F. Will's Jan. 3 column on eminent domain for the Brooklyn Atlantic Yards Project, "In N.Y., government's eminent arrogance," focused on the perversion of "public use" to include "blight" removal and the perversion of "blight" to mean whatever land-hungry developers and their political partners want it to mean. Developer Charles Ratner responded to the column with a misleading letter ["N.Y...

The headline "Atlantic Yards project was not properly presented" refers to: 1) the Empire State Development Corporation's failure to have consultant AKRF do a market study (as contracted ) of the Atlantic Yards footprint and environs and the failure to do a study of neighborhood conditions 2) Columnist George Will's scathing (if flawed ) criticism (which made New York magazine's approval matrix ) of the Empire State Development Corporation's finding of blight in the pursuit of eminent domain for Atlantic Yards 3) Forest City Enterprises CEO Chuck Ratner's complaint that columnist George Will didn't check with the company or elected officials before criticizing Atlantic Yards. 4) the Washington Post's willingness to print Ratner's letter without factchecking on jobs or other issues. Answer: 3. What's in, what's out Chuck Ratner wrote: Mr. Will never contacted the developer -- my company -- or supporters of the project, who include t...

Syndicated columnist George Will, a conservative who played a key role in bringing the controversial Kelo v. New London eminent domain case to national attention, has weighed in on Atlantic Yards, but his timing is different: he wrote about Kelo in September 2004, before the U.S. Supreme Court had even decided to take the case. By contrast, the challenge to eminent domain for Atlantic Yards has been dismissed in both federal court and state court, except for a longshot effort to reopen the latter case in light of a seemingly contradictory lower court ruling on eminent domain regarding the Columbia University expansion. The Will column The first sighting of the Will column, headlined A blight grows in Brooklyn , comes from the Merced Sun-Star, but his column is syndicated in more than 450 newspapers , so it should appear tomorrow in the Washington Post and elsewhere. [Here's the Washington Post version, headlined Avaricious developers and governments twist the meaning of 'blig...

In a conference call today ( webcast ) with investment analysts, Chuck Ratner , CEO of Forest City Enterprises, parent of Forest City Ratner, expressed optimism about the Atlantic Yards project and said more details on the terms for the arena bonds would emerge “by the end of next week.” Another executive said bonds would be sold by early next week. “In summary, we have several things yet to accomplish, and we fully expect to close this project by the end of the year,” Ratner said. “We are in a position to close because we have achieved some major milestones. The first was a letter of intent with an affiliate of Onexim Group, an affiliate of an international private investment fund, to create a strategic partnership for the ownership of the Nets and the development of the Barclays Center arena. This influx of new global capital is strong sign that others also see a value creation opportunity that we see in this great project.” Others might say that Russian tycoon Mikhail Prokhorov—a bi...

To Michael White's very interesting Noticing New York piece on Forest City Ratner's efforts to corner a monopoly on prime Brooklyn land, let me remind readers that Chuck Ratner, CEO of parent Forest City Enterprises, on 9/9/05 told investment analysts: "I will confess that it was less than two or three years ago we were sitting around in New York wondering where the next deals were going to come from. We had finished a whole bunch of office and we completed MetroTech and we didn't have the next great site in Brooklyn. That was one of the reasons we got so aggressive and creative, Bruce and his team did in this Atlantic Yards project. We saw that land sitting there for this last 10 years, realizing it would be a great opportunity if somebody could turn it on."

Forest City Ratner reportedly wants to pay just $20 million to the Metropolitan Transportation Authority for the portion of the Vanderbilt Yard it needs to build the Atlantic Yards arena. It initially promised to pay $100 million for the whole railyard. This series attempts to add some context. In November 2007, according to the Real Deal : White Plains-based developer Arcadia Realty Trust bought a two-acre site in Sheepshead Bay last November for $20 million with plans to build a mixed-use project with 300,000 square feet of retail space. More development at AY site Meanwhile, the 2.27-acre railyard segment (Block 1119, Lot 7) would seem to occupy at least 40% of the arena block--at least the of the arena block would seem to be at least 40%--at least the part east of 5th Avenue.  And the arena would be some 800,000 square feet, with towers and retail on the arena block eventually totaling 1.5 million square feet--the smallest amount that could be built without penalty, according to...

Corrected 4:50 pm to identify speakers and updated 6/6 with Goldstein's comments Well, it sounded like a plan. Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein, a shareholder in Forest City Enterprises, parent company of Atlantic Yards developer Forest City Ratner, went to the company’s annual meeting in Cleveland today to ask management some questions about the project. (It was webcast and will be re-broadcast .) The meeting, held at the Tower City Center began at 2 pm, and it took an hour—after business presentations and reflections on the economy from the company’s patriarch, Sam Miller —before the floor was opened to questions. [When does Goldstein speak? Depending on your player, I'm told, it's at either 59:11 or 1:33:18.] Goldstein’s chance Goldstein was the first and only questioner. He spoke respectfully but his words were not those of a happy investor but of a company critic. (Had he been speaking at last Friday’s oversight hearing , supporters orchestrat...

On February 13, after Gramercy Capital Corporation offered Forest City Ratner a crucial extension on a loan, Chuck Ratner, CEO of parent Forest City Enterprises told the New York Times, “This is a key step in our strategy of proactively managing our debt maturities. By working closely with Gramercy to secure this extension, we have put Atlantic Yards in a position to achieve the vision of economic revitalization, job creation and affordable housing for the future of Brooklyn.” (Emphasis added) What's missing from that statement? First, the original Forest City Ratner slogan of "Jobs, Housing, and Hoops," one which by 2006 had already begun to downplay basketball for an emphasis on affordable housing. Now, the twin promises of economic revitalization" and "job creation" seem calibrated to the current zeitgeist. Second, the primary (but not exclusive) official government goal of the Atlantic Yards project: blight removal. FCR on blight Though Forest City R...

After a tumultuous 2008 , Atlantic Yards faces multiple uncertainties. The developer is closemouthed, the public is under-informed, and no one in government seems particularly up to speed. In his resignation letter yesterday , Empire State Development Corporation (ESDC) Downstate President Avi Schick notably declined to say anything about Atlantic Yards progress. Sometime this year, the fate of the Atlantic Yards arena, at least, should be more clear. (Graphic from AYR via NLG .) Advantages, FCR In New York magazine's "Reasons To Love New York 2008" package, in a short article headlined Because Sometimes Immense, Gratuitous, Noncontextual Acts of Real-estate Ego Don’t Pan Out… , writer Robert Kolker concluded that "At the moment, the old neighborhood is winning." Well, the plan is stalled, but hardly dead, and political backers haven't publicly wavered. Developer Forest City Ratner still has some significant advantages, including generous deadlines with gent...