Atlantic Yards/Pacific Park Report

Greenland Holding Group (aka Greenland Holdings Group) has risen recently in Forbes magazine's Global 2000 listing, reaching 307 this year, from 320 in 2019 and 341 in 2018. The latter was a setback from  326 in 2017, and 323 in 2016. Forbes bases its ranking on four broad metrics: a composite score assessing sales (revenue), profits, assets and market value. By contrast, the better-known Fortune ranking of 176, noted yesterday , is based solely on revenue in the past fiscal year. (Neither ratings addressed issues of debt, which shadow ratings agencies' more tempered views of the company, as I'll write tomorrow.) Had Forbes ranked Greenland only by sales, it would have reached 158, higher than the Fortune designation. The difference relies, at least in part, on different time periods for calculation. Rising market value And if Forbes did its math today, given that Greenland's market value had risen significantly since the magazine's 5/12/20 calculati...

China’s Stock Market Closes In on $10 Trillion Milestone After Its Biggest Crash , Bloomberg reported 7/13/20, noting: China’s domestic equities are worth about $9.5 trillion after this month’s rally, according to data compiled by Bloomberg as of July 12. The advance has taken two of its indexes to 2015 levels and made virtually all of the country’s stock benchmarks overheat. In local currency terms, China’s market cap is already at a record 66 trillion yuan.  But the $10 trillion level also marked the top of the bubble five years ago, a memory that’s still fresh in investors’ minds. Similarities between now and then have started to displease policy makers, who have taken steps to rein in stocks. Has Greenland Holding Group (aka Greenland Holdings Corp. and Greenland Holdings Group), parent of Atlantic Yards/Pacific Park master developer Greenland USA, participated in that bubble? Yes, more or less, though it had a larger bubble years ago. Greenland just closed at  8...

The 2020 edition of the Fortune Global 500 ranking of the world's largest corporations illustrates the rise of China, with 124 companies based in China (including Hong Kong), versus 121 in the United States, the first such change in balance. Amid that, Greenland Holding Group , the Shanghai-based conglomerate parent to Atlantic Yards/Pacific Park master developer Greenland USA, has risen to 176 from 202, part of a mostly steady rise that nonetheless lags behind previously stated ambitions. Note that Fortune's ranking is based on revenue in the past fiscal year, and does not address issues of debt, which shadow ratings agencies' more tempered views of the company. A new rivalry Fortune, in a major story headlined in the August/September 2020 issue as "And then there were two" and online as Why the China-U.S. rivalry is at a crucial turning point—and what it means for business , suggests it remains to be seen which country will emerge from the pandemic wi...

There's a very intriguing passage about Atlantic Yards in the 5/16/18 Hey BK podcast hosted by Ofer Cohen, founder of TerraTRG. ( Transcript here . More about the podcast here .) Cohen's guest was David Ehrenberg , who served as Executive Vice President of the New York City Economic Development Corporation (NYC EDC) from 2006 through 2013, before leaving that year to lead the Brooklyn Navy Yard Development Corporation. Go to 5:56. Host Cohen narrates: David Ehrenberg is Brooklyn, born and raised. He knew he wanted to lead the Navy Yard even before the job was open and he put himself in the running. It was the tail end of the Bloomberg Administration and David was working for the city on some of its biggest projects. Guest Ehrenberg speaks: And at my level, I became just, you know, the kind of the fix-it person. So when a project got off the rails, I went in and had to solve it, which, y'know, is great learning experience and I've got to say--I learned most o...

Former Forest City Ratner/Forest City New York CEO MaryAnne Gilmartin, who left for L&L MAG and then (slowly) established MAG Partners, is also now board chair and interim CEO of the real estate investment trust Mack-Cali, after a board shakeup led by activist investors. In speaking to investment analysts 8/3/20, she buffed the history of Atlantic Yards/Pacific Park by claiming, wrongly, that she had "leased thousands of units" at the project, even though only 964 rental units had been built, with 81% of them "affordable" and thus--in the main--easier to lease. In other words, it was not as much of an achievement as she professed. From the transcript From  Edited Transcript of Mack-Cali Realty Corp earnings conference call or presentation Monday, August 3, 2020  (which I confirmed after listening to the audio), an excerpt from Gilmartin's prepared closing remarks: I'd like to conclude with a comment on leadership through a change and challen...

We know Joe Tsai, owner of the Brooklyn Nets, New York Liberty, and Barclays Center, as a businessman, co-founder of the Internet behemoth Alibaba, COVID-19 philanthropist, Black Lives Matter supporter, encourager of peaceful protests at the arena. But, remember, the Taiwanese-Canadian is also a big defender of China, where his fortune was built. Last year, when Houston Rockets' GM Daryl Morey expressed support for Hong Kong protesters movement, Tsai responded with a long Facebook post echoing the Chinese government stance. And, if you read carefully an 8/1/20 article in The Atlantic,  A Newsroom at the Edge of Autocracy , Tsai plays a key role overseeing "arguably the world’s most important newspaper." No, the South China Morning Post , Hong Kong's dominant English-language newspaper, is not the New York Times or The Guardian or the Sydney Morning Herald. But, argues Timothy McLaughlin, it's important "for what it tells us about media freedoms as C...

It's not surprising, given the pandemic and recession, that discounts have returned to market-rate rental units at 461 Dean , the residential tower--50% affordable, 50% market-rate--at the southwest flank of the Barclays Center. It's the only tower in Atlantic Yards/Pacific Park built via modular construction. Unit 9B, from StreetEasy Indeed, given short-term discounts that lower the net effective rent on a 12-month lease (while likely re-setting upon lease renewal), studio and one-bedroom apartments are available at well below the middle-income "affordable" rents set in city-financed or -approved properties. Consider unit 9B , a studio which recently had its net effective rent listed at $2,138, while the gross rent is $2,700 per month. That's $32,400/year. Divide that sum by $2,138, and the result is more than 15: so that's three free months. Low security deposit Unit 6N, from StreetEasy Beyond that, the building--owned by Principal Global I...

City, construction unions strike deal to hire low-income workers , The Real Deal's Kathryn Brenzel reported yesterday, citing a (for now) under wraps "project labor agreement with the Building and Construction Trades Council of Greater New York that guarantees unions will 'prioritize referral' of workers who live in areas where 15 percent of the population lives below the federal poverty level or are residents of public housing." So that could mean up to 26,000 construction jobs on city owned properties as well as "selected future projects," and help further integrate construction unions, some of which are long clannish.  But the devil will be in the details, including questions of enforcement and even whether the qualifications can be gamed. After all, hiring of minority and women workers in projects like Atlantic Yards/Pacific Park has been treated as a goal, not a guarantee.  That's in both the non-governmental Community Benefits Agreem...

After one month, the "bubble" at Disney World in Orlando is working, pretty much, with no positive COVID-19 tests and high TV ratings for the truncated season and partial roster of teams. But there are still two months to go, and, as The Athletic's David Aldridge and John Hollinger reported yesterday, the unnatural situation is causing stress. So that means, as they write,  Bubbles, bubbles, toil and troubles: there’s no clear NBA picture for 2020-21 . There are question marks about timing, vaccine, and presence of fans. They suggest it's "increasingly unlikely" the season would start by the previously announced date of Dec. 1 date, Some think the season should be pushed back to March, since that might accommodate a vaccine or other measures that would put some fans in seats and especially help small-market teams. And though playing in another bubble would be costly, it may be the only solution, if the pandemic isn't arrested. And this is intere...

Barclays Center's parent BSE Global has lost another top executive. After the exit in April of Chief Financial Officer Eu-Gene Sung, and the departure in June of Executive Vice President of Programming & Development Keith Sheldon, last month marked the departure of Bryan Calka, who served for about two years as Senior VP, Global Partnerships. Calka  left for a similarly titled job, Senior VP, Partnership Sales , with the New York Islanders, a team with a new arena opening next year and, presumably, a longer list of partnerships to negotiate. No replacement at BSE Global has been announced yet. The power of partnership$ Calka, for example, was quoted in this 11/21/19 press release from GOAT, the global platform for style, headlined Brooklyn Nets And GOAT Create Runway Entrance To Showcase Player Style : "We are thrilled to partner with GOAT for the 2019-20 season," said Bryan Calka, Senior Vice President of Global Partnerships at BSE Global. "In tod...

When, in 2016, New York State approved a refinancing of the bonds for the Barclays Center, allowing a lower interest rate and thus smaller payments to bondholders, that offered a clear but indirect benefit to the arena operating company, then owned by Mikhail Prokhorov. Because required PILOTs (payments in lieu of taxes) remained consistent--having been set earlier to correllate with tax assessments , enabling tax-exempt bonds, which offer the arena operator savings compared to taxable bonds--a larger component of those payments could be reserved for O&M (operations and maintenance costs) reimbursements, thus saving the arena operator from paying them. The PILOTs go both to bondholders and the O&M Fund. From 2016 bond document: click to enlarge That increased the amount of O&M funds from some $3 million to more than $11 million a year, as I wrote , and it was part of why Bloomberg characterized the move as Barclays Center Refinancing Saves $90 Million for Prokhorov ...

Construction of the long-awaited platform over the first block of the Vanderbilt Yard, necessary for the construction of three towers, "will commence" in the second half of the year, according to a memo (bottom, excerpted below right) dated May 6 from the main project developer, Greenland USA, to state officials. While that statement--in a required six-month look-ahead submitted to Empire State Development--is far more specific than recent public comments, it isn't necessarily a guarantee. Nearly three months after the memo was sent, the author of the memo, Greenland's Scott Solish, was noncommital when asked about the platform. “We are in discussions with a contractor and LIRR,” Solish said at a 7/28/20 meeting of the advisory Atlantic Yards Community Development Corporation, not offering any prediction on timing. After all, the project has a history of deadlines getting stretched, and other forecasts in such six-month look-ahead documents have been overopti...

The latest Atlantic Yards/Pacific Park Construction Update (bottom), covering the two weeks beginning Monday, 8/10/20, was circulated Friday, 8/7/20 at 4:16 pm (lead time) by Empire State Development (ESD) after preparation by Greenland Forest City Partners. Judging from the text highlighted in in red in the document below, the only possible new work (compared with the previous update ) cited is excavation and foundation work for the B12 (615 Dean) and B13 (595 Dean) towers, which would include "oversized equipment (i.e. drill rigs, excavators, etc.) during early morning hours." Then again, such work was noted in the three previous two-week updates as expected to commence. Progress at B4 & B15 At the B4 tower (18 Sixth Avenue) and B15 tower (37 Sixth), interior construction of residential units has begun--new work, though not marked as such. Also, the document offers a new deadline, saying that the B4 concrete superstructure should be completed by the end of Dec...

Oh, well. The 6/29/30 announcement by Gov. Andrew Cuomo that the MTV Video Music Awards would return to the Barclays Center Aug. 30, with limited or no audience (and later clarified to no audience), has been overtaken by a decision not to hold an indoor event at all, but rather several outdoor performances around the city. That's a blow to arena managers' efforts to resume some revenue-producing events. That said, according to former arena executive Irina Pavlova, the arena operator would've incurred a loss. The VMAs are a “reputational” special event to put a venue on the map. It’s not a money-maker even in the good times. As a special event, it’ll have its own sponsors which don’t benefit the arena. Also huge load-in/out times, big egos etc = high costs that the venue absorbs — Irina Pavlova (@TheRealPavlova) August 8, 2020 Page Six  reported  yesterday: A source told Page Six earlier this week that some staffers expressed they did not feel safe going ahead with...

‘MADE FOR MUSIC, BUILT FOR HOCKEY’ , VenuesNow reported 8/6/20, suggesting that the new UBS Arena at Belmont Park, thanks to the much larger footprint than urban arenas, will save money and time for multi-truck concert productions. The arena, scheduled to open in 2021, "sits on 400 acres," according to article, which isn't accurate. But the larger footprint does allow more loading docks and backstage areas “What’s unique about New York is you have an elevator and turntable at Barclays Center that artists have to deal with for tour production,” Tim Leiweke, chairman and co-founder of arena developer Oak View Group, told the publication. “When you have a 24-truck tour like Drake, you’ve got to load in one truck at a time, go down, hit the turntable, spin it around and unload it. In the case of the Garden, you’ve got a ramp that takes you up five levels and you (unload) one truck at a time.” That adds time, and cost, given union expenses. So much for the 2013 stat...

Paramount: Aug. 3, 2020. Beyond the scaffolding, are no posted permits for other approved work. It's, um, interesting that Long Island University can issue a press release about a new initiative with Jay-Z's Roc Nation, but can't answer press questions about the fate of the apparently-stalled plan to renovate the Paramount Theater, right. Here's coverage in the Associated Press,  Roc Nation Partners With Brooklyn’s LIU to Launch New School  and the New York Daily News,  Jay-Z, Roc Nation open new school of entertainment management at Long Island University , based on the press release below. There's no little irony that Brett Yormark, Roc Nation's President of Business Operations & Strategy, would say in yesterday's press release, "After many years of working with LIU, I know how important music and sports are to both Dr. [Kimberly] Cline and the LIU Board of Trustees, so I was thrilled to be able to partner with them." After all, t...

The financially stretched Barclays Center, not surprisingly, is in deep(er) financial trouble after shuttering for the coronavirus crisis, with its $29.1 million in revenues dwarfed by $31.2 million expenses over the first half of this calendar year, according to financial documents released yesterday. And it's worse than a $2.1 million loss suggests. The arena is supposed to amass a significant cushion of net income, leaving ample cash to pay off some $36.2 million in annual required PILOTs (payments in lieu of taxes). Those PILOTs include $24.8 million in net debt service to pay for arena construction, plus a significant chunk that go back into arena operations and maintenance (see below). As described below, though the arena operating company was in the black for the first half of FY 2020, the annual net income will be too little to cover PILOTs. That said, a default is not coming. Billionaire Joe Tsai, who owns the Brooklyn Nets and the arena operating company, ...