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November 2, 2009

Uncertainty, Skepticism Around Arena Bond Offering

barclays-arena-1109.jpg
There was a lot of discussion last week about the viability and timing of the issuance of debt to finance the construction of Barclay's Arena, the centerpiece of the Atlantic Yards project. First, on Wednesday, the blog Noticing New York wrote, "We have never seen so many loose ends and approvals that are not in place." On Thursday, Reuters followed up with an article that quoted the ESDC chief financial officer Frances Walton as saying "The expectation is that they will be issued...We have begun discussions with ratings agencies." That same day Bond Buyer quoted Ms. Walton as saying, “The structure and the timing of the bonds are still in flux,” (Two weeks ago The WSJ called the odds of the bond sale going through a "toss up"); the same article also floated the idea that the bonds could be structured with an early call to be exercised in the event that the plaintiffs prevail in their eminent domain case (which is expected to be decided by the end of this month but not before the issuance date scheduled for the week of November 16. Noticing New York followed up with its own analysis on Friday, questioning whether such a structure would threaten the tax-exempt status of the bonds. Meanwhile, the Community Development Financial Institutions Fund, a Federal entity, just gave $55 million to Forest City Community Development Entity, LLC in Brooklyn. As Atlantic Yards Report points out, grants from the Financial Institutions Fund are targeted at "highly distressed low-income communities," the kind where Ratner plans to sell condos at $1,217 a foot.
ESDC’s Bond Buyer Happy Talk About Arena Bonds [Noticing New York]
So Many Unchecked Approval Boxes [Noticing New York]
Sale of Nets' Arena Debt Is Tough Shot [WSJ]
NYS Sets Big Bond Sale, Waits on Other Large Issues [No Land Grab]
Atlantic Yard Bonds May Be Sold, Escrowed [Bond Buyer]
Bond Buyer Article Excerpted [DDDB]
Forest City Gets $55M [AYR]
Photo by Tracy Collins




Posted by Brownstoner at 10:01 AM | Comments (27)
Categories: Atlantic Yards

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Comments

I don't think the roads are that big.

Posted by: tybur6 at November 2, 2009 10:05 AM

The curse of Robert Moses.

***Bill Thompson for Mayor (TOMORROW!!!)***

Posted by: Brownstones Half Off at November 2, 2009 10:09 AM

I got news for the writers of this article: Even if Ratner is successful, he ain't selling condos at $1,217/sq. ft. If bonds buyers are planning on getting repaid on projected sales at those numbers they are going to be SOL.

Posted by: Brokedeveloper at November 2, 2009 10:13 AM

Nice to see CDFIF giving more taxpayer money away. Funny but a no-income hole in the ground is not a low income highly distressed community. Disgusting.

Posted by: bxgrl at November 2, 2009 10:17 AM


A big fat disaster. If it wasn't for the fact that my tax dollars are underwriting this mess I'd laugh. Welfare for billionaires.

Posted by: Johnny at November 2, 2009 10:20 AM

Love the model. The only time there are that few cars on Atlantic and Flatbush are maybe 4 in the morning. For accuracy, they should have had then bumper to bumper, with a couple of extra "I'm going to get through this if it kills me, and everyone around me" lanes squeezed in.

This project will be the case study for cronyism, backroom deals and corporate welfare for generations to come.

Posted by: Montrose Morris at November 2, 2009 10:27 AM

Where are the pro-Atlantic Yards commenters? What can they say in defense of it now?

Posted by: Schultz at November 2, 2009 11:28 AM

Could it be they are actually too embarrassed?? Naaaah.

Posted by: bxgrl at November 2, 2009 11:40 AM

Just when you think this boondoggle can't get worse, there is yet another $55 million of public funds (really needed in other parts of the community)going into the Atlantic Yards sink hole. I've lost the ability to laugh at this disaster. And yes, that model showing a sprinkling of cars on Atlantic and Flatbush is sheer fiction.

Posted by: Brooklyn Red at November 2, 2009 11:43 AM

I didn't know there were so many fiscally conservative Republicans on Brownstoner. Normally in NYC I'm used to hearing about how government dollars spent in the private sector, or to stimulate "shovel-ready" projects is a good thing for jobs, or has a GDP multiplier of 1.5.

Posted by: havelc at November 2, 2009 11:55 AM

you don't have to be a "fiscally conservative republican" to see a waste of money when it slaps you in the face. In fact many of the so-called fiscally conservative republicans don't see it either. There was an article today about how those Texas Republicans who "opposed" the stimulus funds are now raking it in more than Democrats.

Posted by: bxgrl at November 2, 2009 12:40 PM

Thing looks like a giant panini press.

Posted by: Frederick Law Homestead at November 2, 2009 1:24 PM

What is there to "say"

Obviously the bond sale is no slam dunk - so what - is this news???

And the $55M as far as I can tell (granted only cursory but I do have job unlike Messier Goldstein) is NOT allocated for AY - of course DDDB's argument is that "all money is fungible" - which of course in this context is kinda like a 'slippery slope argument' - it sounds good as a sound bite but on closer inspection doesnt hold much water.

Posted by: fsrg at November 2, 2009 3:22 PM

It actually reminds me of a pocketbook I once had. the row of windows even looks like the zipper it had.

Yes, I was rather shocked by the apparently very inappropiate disbursement of $55 million. Was that handed to them in one go or is just a promise? What? Are they on life support and need injections of millions just to keep afloat?

I agree, there often is a LOT of traffic at that intersection. It can already be a mess weekends and certain times of weekdays. How in heck could any more traffic be handled?

Although I've not a huge Gehry fan, I really would have preferred something exciting-looking instead of this rusted post-apocolyptic, sci-fi movie, spaceship docking station (AKA Brown Handbag On Its Side).

Posted by: BrooklynGreene at November 2, 2009 3:26 PM

It actually looks like a George Foreman grill to me.

Posted by: Brokedeveloper at November 2, 2009 3:40 PM

FSRQ, the $55 million tax credit is completely allocated for AY. That is, at least, according to the ESDC.

http://atlanticyardsreport.blogspot.com/2009/10/forest-city-gets-55m-in-federal-tax.html

Not fungible, not made up. Just a quick and easy fact.

Posted by: DDDB at November 2, 2009 4:06 PM

DDDB - no it isnt an "easy fact" - you cite - you OWN website as proof. Hardly a verifiable source - additionally as you yourself note this isnt $55M being given to FCR as the above article says- it is a tax credit which is far different and may apply to the affordable housing component - I dont know - and apparently neither do you.

All you did is do a google search, found the press release, and then said - "The Sky is Falling, They are giving another $55M to AY", then underneath this inflamatory headline you put some dicta about talking to someone at ESDC.....there is clearly alot more to this than you imply, but you have your agenda and cannot be trusted to do unbiased objective research, and lord knows if I spent my time chasing down the validity of everyone of your tabloid accusations I'd be as unemployed as you (without the trustfund)....

You know what - maybe FCR is getting $55M in under the table payola - but thats the problem with yelling and screaming like a hysterical madman all the time about everything - after awhile no one cares.....

Posted by: fsrg at November 2, 2009 4:54 PM

Actually, a lot of people do still care.

Posted by: bxgrl at November 2, 2009 5:06 PM

"Actually, a lot of people do still care."

No one that matters

Posted by: fsrg at November 2, 2009 5:11 PM

No need to be sh*tty about it.

Posted by: bxgrl at November 2, 2009 5:26 PM

Actually FSRQ we pointed to the Atlantic Yards Report. Not our "own website." And what we were pointing to was a direct quote from the Empire State Development Corporation confirming that the tax credit goes, entirely, to Atlantic Yards.

Our website is DDDB.net, On it we broke the news about this tax credit, not from a Google search, but rather from a federal document. You'll not in the post Brownstoner links to we explain that it is a tax credit.

Posted by: DDDB at November 2, 2009 5:45 PM

bxgrl - I wasn't referring to present company- although unfortunately we (myself included) probably dont matter much either

Posted by: fsrg at November 2, 2009 6:34 PM

This arena will be built and Thompson will most definitely lose tomorrow. I am so looking forward to voting against him and then never hearing from him again.

D-O-N-E-D-E-A-L!!!

Posted by: Big Jugs at November 2, 2009 7:06 PM

Look: the Travelocity troll is checking out the model.

Posted by: altervoce at November 2, 2009 8:41 PM

"Actually, a lot of people do still care."

No one that matters

Posted by: fsrg at November 2, 2009 5:11 PM


Well you are still posting, so you must care, and so...I guess your opinion don't matter either?

You a flinging accusations at an organization. Calling DDDB propaganda is simply hilarious. Once again spewing nonsense about trust funds and lies. Yet you continue to support a billionaire developer, which by nature is pretty much not exactly the people's kind of people.
Get a grip.

Posted by: NotIgnorant at November 3, 2009 8:30 AM

POO MIST

Posted by: IMBY at November 3, 2009 8:38 AM

It's a George Foreman Grill. I said it from the beginning and I expect royalties when official naming rights are transferred from Barclays Bank to George Foreman.

Can't wait to eat a panini while watching the Nyets at the George Foreman Grill Arena.

Posted by: edgeland at November 9, 2009 1:03 PM

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