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At conference call, Forest City executives say "we are prepared to move forward" on Atlantic Yards arena

In a conference call with investment analysts today, Forest City Enterprises executives maintained optimism about the Atlantic Yards arena but also hedged with some of their language, saying "we are prepared to move forward" rather than committing with more certainty.

They were not asked any tough questions, such as whether architect Frank Gehry is actively working on the project.

Careful language on AY

CEO Chuck Ratner, in his prepared remarks, essentially repeated the message from yesterday's press release: "As you may have seen, we recently achieved another legal victory with the state appellate court upheld a prior State Supreme Court ruling related to public approvals and environmental review. We have one material lawsuit pending, and when we have cleared the legal hurdles, we are prepared to move forward with the first phase of development at Atlantic Yards."

He didn't predict a timeline.

Later, an investment analyst asked about the likelihood of Atlantic …

New 35th District candidate: AY too distracting and James should have been a "facilitator"

If City Council Member Letitia James is a prominent opponent of Atlantic Yards and challenger Delia Hunley-Adossa is a prominent supporter (even if she's not talking about it), third candidate Medhanie Estiphanos is apparently trying to split the difference.

In an interview with the New York Times's blog, The Local, Estiphanos, who doesn't mention AY on his web site, says the project has been "incredibly detrimental to the community" mainly because "it’s taken too much of people’s time and focus" from other, more pressing matters.

Perhaps, but issues he prioritizes like education and affordable housing are also citywide issues, involving a larger number of stakeholders, giving local political officials somewhat less of a voice. Atlantic Yards is a local land use issue--or, at least, should have been, had it not gone through the state process overriding local zoning.

In the middle?

The Times reports:
While Mr. Estiphanos said he shared many of Ms. James’s res…

Was the Izod Center 61% full last night?

The announced attendance (but not necessarily gate count) for last night's home game between the New Jersey Nets and Milwaukee Bucks was 12,205, or 61.1% of the 19,968 capacity.

I doubt that many people attended, and surely there were not that many people there by the early fourth quarter of a blowout loss, as the photo indicates.

Cropped from photo by Ray Amati/NBAE via Getty Images, copyright 2009 NBAE.

At today's conference call, will investment analysts finally ask FCE what exactly Frank Gehry is doing?

Last December 10, I challenged the investment analysts following Forest City Enterprises to ask the company some tough questions about Atlantic Yards, notably the reason for stopping work at the Vanderbilt Yard and the timing of the project. They didn't.

Today they have another more opportunity, at an 11 a.m. conference call.

As I wrote, the investment analysts have heard those executives continually revise the timetable for and the promises regarding Atlantic Yards without acknowledging the inaccuracy of past statements. 
If the analysts don't ask some hard questions, they will sound ever more captive of the companies they cover, another example of the failure of the Wall Street ecosystem.
(FCE A stock closed yesterday at $3.41, down 8.9% from $3.74.)

What's Gehry's role?

This conference call should make it a little easier to focus on Atlantic Yards, because the arena is one of only two projects the developer expects to launch this year (though the timetable is questionable…

As foreclosures increase, real blight (unlike AY 'blight') creates "real-estate panic"

Recent coverage of the foreclosure crisis around the country reinforces the definition of blight offered by urban planning professor Lynne Sagalyn: where "the fabric of a community is shot to hell."

Outside Cleveland, the New York Times reported March 23, the city of "Euclid has installed alarm systems in some vacant houses to keep out people hoping to steal lights and other fixtures, drug users and squatters." 

Euclid and other inner suburbs are spending "millions of dollars to maintain vacant houses as they try to contain blight and real-estate panic."

Yesterday, the Times reported on "bank walkaways," in which the banks won't even take possession of properties because it costs more to do so than the value of the real estate.

And in the AY footprint?

In the case of Atlantic Yards, there were some vacant buildings and empty lots, but there was and remains enormous demand for the land in and around the AY footprint.

That's why the failure by c…

What's left out of New York magazine's AY footprint

Here's the print issue version of New York magazine's Atlantic Yards timeline.

(Click to enlarge)

It's worth noting that the Frank Gehry rendering at the top represents only Phase 1, the arena block, bounded by Flatbush, Atlantic, and Sixth avenues, and by Dean Street. (Site 5 is omitted.)

It's also worth noting that the photo at bottom, which shows Forest City Ratner's malls and the Williamsburgh Savings Bank for perspective, only portrays part of the arena block. It focuses mainly on (part of) the Vanderbilt Yard, cutting off the block bounded by Flatbush, Fifth, and Sixth avenues, and Dean Street--the block that houses plaintiffs in two lawsuits.

More perspective

This photo by Jonathan Barkey, who took multiple aerial photos, provides more perspective.

Much of the project footprint is highlighted in the larger oval, with the arena block in the foreground, up to the bridge. The smaller ovals show towers in adjacent neighborhoods.

Forest City Enterprises announces losses, asserts that AY arena is one of only two new projects to launch in 2009

In another sign that the Atlantic Yards project is crucial to its struggling business, Forest City Enterprises (FCE) today announced in its year-end fiscal results that it would continue to significantly slow development, anticipating that it would commence construction on only two new projects, "the arena at our Atlantic Yards project in Brooklyn, and a fee-based development project in Las Vegas."

However, there are several doubts regarding arena construction, including pending legal cases disregarded by the developer and the availability of financing. While Forest City is indeed closer to starting construction than in previous years, consider that in 2007, for example, FCE CEO Chuck Ratner and other executives asserted that the arena would open in 2009, and New Jersey Nets CEO Brett Yormark has consistently shifted the goalposts.

In fact, in a 10-K document filed today with the Securities and Exchange Commission, the developer acknowledges that 2011 is hardly certain:
The Net…

In effort to appeal EIS case, plaintiffs charge "evidence of corruption" in ESDC's blight study

On the same day that developer Forest City Enterprises asserted in a press release that "only one material lawsuit" is pending in the Atlantic Yards case, project opponent Develop Don't Destroy Brooklyn (DDDB) announced that one other lawsuit may indeed be alive.

In an effort to reverse an appeals court’s February decision rejecting an appeal of a trial judge's dismissal of the case challenging the Atlantic Yards environmental review, DDDB and 25 co-plaintiff community and civic groups have asked (PDF) the Appellate Division, First Department, to allow the state’s highest court to review the decision, arguing that the blight study by Empire State Development Corporation (ESDC) did not contain simply errors or misjudgments but rather is associated with “evidence of corruption” and that a for-profit company should not be able to lease a publicly-owned arena for a dollar a year.

Decision said to be tainted

The ESDC, argue the appellants, was “purposefully disregarding the …

More criticism of the Atlantic Yards Community Benefits Agreement: it (mostly) doesn’t apply if Ratner sells the project

The Atlantic Yards Community Benefits Agreement (CBA), proclaimed Brooklyn Borough President Marty Markowitz in 2005, is “so comprehensive and far-reaching that it puts Brooklyn in a class by itself, at the forefront of the corporate responsibility movement.”

And Forest City Ratner executives have trumpeted “substantial legally enforceable penalties for a failure by FCRC to fulfill its obligations.”

However, a national expert on CBAs, speaking at a conference in Brooklyn Friday, identified three serious flaws in the AY CBA: it (mostly) doesn’t apply if Forest City Ratner sells the project; there are several roadblocks to enforcing the current obligations; and structures to implement the plan have apparently not been set up.

The two latter criticisms have been aired in the past, as have other concerns about enforceability, but I've heard little about the issue of successorship.

Importance of enforcement

The criticisms were raised at a panel titled “Community Input in Megadevelopments,” …

NYC EDC's Pinsky: Atlantic Yards "not over" but "missed the market;" is streamlining environmental review the answer?

On Friday, New York City Economic Development Corporation (NYC EDC) President Seth Pinsky was the luncheon speaker at Getting It Right: Government’s Role in Housing and Economic Development, a symposium held at Brooklyn Law School.

In his address, he talked about Yankee Stadium, CitiField, the World Trade Center site, Hudson Yards, Coney Island, Willets Point, and Hunters Point South, among other major projects.

Unmentioned was Atlantic Yards, Brooklyn's most controversial project, so, during the Q&A, I brought it up in a nonconfrontational way (despite the temptation to ask whether NYC EDC would ever tell me how much the project costs).

"Are there any lessons to be learned from Atlantic Yards?" I asked.

Tricky environment

"Yes. The first is that it’s not over ‘til it’s over," Pinsky replied, to some chuckles. "We continue to work with Forest City and think that there are steps that can be taken that can allow that project to move forward. We’re hoping that…

New York magazine's timeline: "The Fall of the Atlantic Yards Megaplan"

A New York magazine timeline is titled Atlantic Yards, Inch by Inch: You can sue, sue, sue—but nothing ruins megaplans like a crashing economy.

Well, maybe. But keep in mind that the City Funding Agreement and the State Funding Agreement, both of which were signed during the optimistic economy of September 2007, give the developer a much longer leash to build a much smaller project that the December 2006 state approval seemingly enshrined.

And it could be argued that megaplans are ruined by their "mega"-ness and the lack of democratic process.

In other words, a somewhat less ambitious plan, involving multiple parcels and multiple developers, going through (rather than around) the city's Uniform Land Use Review Procedure (ULURP), would not have generated such opposition and could have led to development (though, most likely, not an arena.)

Project isn't dead

Keep in mind that, despite an alternate headline, "The Fall of the Atlantic Yards Megaplan," the project i…

Why the New York Times needs to cover the Gehry story

Architect Frank Gehry's doubts about the Atlantic Yards project, which surfaced last week, generated widespread coverage, including in the New York Daily News and New York Post, and some creative backpedaling from Nets CEO Brett Yormark.

The New York Times ignored it. However, as DDDB reminds us, only a little more than a year ago, on 3/21/08, Forest City Ratner CEO Bruce Ratner "did say he was confident about starting construction on a $950 million basketball arena for the Nets by the end of the year."

That didn't happen. And now Yormark is promising construction this year. But there are a number of variables, and all predictions should be taken with a grain of salt. So the Times should be asking questions, rather than reprinting Bloomberg News stories based on Yormarkisms.

The Gehry born-in-Brooklyn claim may have started in the Brooklyn Paper

It was a tempest in a teapot last March: Forest City Ratner claimed, in legal papers and on its web site, that Atlantic Yards architect Frank Gehry was born in Brooklyn. When it was pointed out that Gehry actually was born in Toronto, FCR changed the Atlantic Yards web page.

Given that biographical information about Gehry is readily available, I think Forest City Ratner should've gotten it right, but I recently concluded that the developer doesn't deserve all the blame. The Brooklyn Paper also reported the born-in-Brooklyn claim when the project was announced nearly five years ago.

Back in 2003

In a 12/15/03 article (link to PDF of full issue) headlined "ARENA SET FOR NETS", the Brooklyn Paper reported:
This project would mark his first foray into Brooklyn, although the world-renowned architect and winner of the prestigious Pritzker Award said he was born in Brooklyn and lived on Flatbush Avenue and Avenue J in Flatlands.

Either Gehry was fabricating his past or the Brook…

"Dee raises more than Tish" and other reasons for more journalistic voices (plus a new 35th District candidate)

"Society doesn’t need newspapers," wrote Clay Shirky recently in a much-discussed analysis of the fate of the press. "What we need is journalism."

In other words, we don't need another newspaper now owned by the same publisher to tell us that the headline "Dee raises more than Tish" (attached to an article written by the Courier-Life's inimitableStephen Witt) could easily have been rewritten.

How about: "Challenger Hunley-Adossa holds first fundraiser; incumbent James has yet to hold one" (in the race for the 35th Council District).
And we need more independent media, as Sharon Toomer, former communications director for Borough President Marty Markowitz, reminds us.

Selling Hunley-Adossa short

Curiously enough, the Courier-Life's Witt sells Hunley-Adossa's campaign short, attributing to "sources" some broad-brush generalizations:James will also get the anti-arena crowd in droves and the churches, sources said.

Well, won't…

Correction: Yes, Atlantic Yards has been submitted for stimulus funds, but not by ESDC

[Update and correction 6:55 pm] I had written this morning, based on a state document, that "apparently, Atlantic Yards is shovel-ready, according to the Empire State Development Corporation (ESDC), which had gone back-and-forth on that issue."

A cryptic entry in the massive, 774-page Second Draft List - Project Proposals (PDF), issued March 25 by the New York State Economic Recovery and Reinvestment Cabinet, mentions AY but, in contrast to most other projects, without a budget or a description. (Click to enlarge)

Not submitted by ESDC

My error. I should've emphasized the caveat (below), which cited "projects submitted by municipalities, organizations and individuals throughout New York State."

Before I left for a day-long conference, I sent a query to the ESDC. When I returned at nearly 6 pm, I saw the response, which said all questions about stimulus funding should be directed to the governor's office.

I contacted Erin Duggan, who's handling press for the…

The Barclays naming rights deal may be well under $400 million after all

Maybe, as British news report with an unnamed source indicates, Barclays Capital would pay much less than the reported $400 million for the Atlantic Yards arena naming rights deal

One of the lingering questions of the AY saga is why Barclays has stuck with the deal so steadfastly. Sure, they believed--not without evidence--that a Brooklyn arena might be a way to splash their name across America.

But they signed up in January 2007 for a Frank Gehry arena, not an "inspired by Frank Gehry arena" or a "Frank Gehry arena produced by architects who happen to work for someone else."

So as New Jersey Nets CEO (Chief Exaggeration Officer, to NLG) Brett Yormark does damage control about Gehry's role, maybe Barclays has already renegotiated the deal downward.

Reports the Independent:
The deal is a 20-year commitment, originally valued between $300m and $400m, but the bank is believed to have renegotiated the cost down since then.

A theory about the leak

The financially savvy Br…

Behind Hunley-Adossa's campaign, treasurer Nimmons heads another dubious nonprofit, with Ratner funding

In her challenge to Council Member Letitia James in the 35th District race, Delia Hunley-Adossa relies significantly on her campaign treasurer, Charlene Nimmons, who also heads a questionable fledgling nonprofit organization that signed the Atlantic Yards Community Benefits Agreement (CBA).

As with Hunley-Adossa’s Brooklyn Endeavor Experience (BEE), Nimmons’s Public Housing Communities (PHC) likely relies on the largess of developer Forest City Ratner.

(Neither would confirm or deny that most funding comes from FCR, though Hunley-Adossa has acknowledged that FCR supported one program and Nimmons has cited an FCR-supported event sponsored by her organization.)

If so, given the light workload of both nonprofits, the salaries Nimmons and Hunley-Adossa both draw from their nonprofits give them leave to work on the campaign--which suggests that the developer is supporting the challenge to James even without direct contributions.

Nimmons was on the dais last December at the MetroTech tree ligh…