How Will Wall Street’s Chaos Affect Atlantic Yards?

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We don’t know the answer to that, of course, but even before this latest Wall Street fiasco, the Atlantic Yards project was seeming particularly vulnerable. We heard last week that Forest City Ratner plans to break ground on Phase 1 (arena, a few towers) in December, though the NY Times pointed out that the project was marred by “the softening economy, the crisis in the debt markets, rising costs and a persistent group of opponents who have filed one lawsuit after another.” But if folks were wondering if Phase II was ever going to happen — you know, that whole affordable housing part of it — now they wonder if we’ll ever see the dawning of Phase I. One sign in the project’s favor is that Barclays Bank, the namesake of the arena, seems to be holding up, and has plans to buy Lehman’s investment banking and capital markets operations. Still, Atlantic Yards Report noted that Barclay’s required financing to be set by November if their deal was to go through, and that they still need a tenant for building one, a tougher sell in light of the financial crisis. As AMNY noted, “Big projects like the new World Trade Center and the Atlantic Yards could grind to a halt, according to Chris Jones, a researcher at the Regional Plan Association, should financing becomes more difficult and tax revenues dry up.” Right now, Atlantic Yards’ fate still rests somewhat with the Treasury Department, that has yet to rule on whether FCRC can use PILOTs (payments in lieu of taxes) to pay off bonds. Considering FCRC has admitted that they need additional subsidies to realize their vision, and we’re knee deep in government buyouts and bailouts, that seems unlikely, too.
Atlantic Yards Community Liaison Office. Photo by Tracy Collins.

0 Comment

  • Brownstoner

    I admittedly don’t know that much about AY but I just don’t see how anything of this size goes forward in this economic environment.

  • Potentially better news for those of us that oppose this debacle is in today’s Times. Congressman questioning the legality of taxpayers giving the Steinbrenners a much smaller handout than the one Ratner’s trying to bilk from us.

    All Ratner’s doing is digging a few holes so he can say the project’s started. It’ll stop once he runs out of money – that being the $50 million we already gave him for affordable housing.

  • The developer will get more subsidies and deliver fewer community benefits. That’s the developer’s business model. It’s just more obvious now. We’ll get a stadium + traffic. The “affordable housing” component will keep getting pushed furterh out in time.

  • If the project is yet again delayed, how will this affect some of the new developments going up in the area? Some of the developers as far out as Washington Ave were depending on this new traffic. thoughts ?

  • babs

    Will Barclay’s still want to give Ratner all that money after he hired Goldman (not ex-Lehman) to underwrite his bonds? Or maybe he’ll change underwriters?

  • That’s right, Boerum Hill, but I bet he’ll build a few luxury towers, too. He might have to rent for a while, but he’ll get his money back on that. And the space for “affordable housing” will be a vast, blacktop parking lot. Just what we all wanted.