The odds of the Atlantic Yards project being a financial success (and therefore getting completed) look a little dicier based on the information contained in 660 pages of financial information released by the Empire State Development Corporation in response to assemblyman James Brennan’s and State Senator Velmanette Montgomery’s Freedom of Information lawsuit filed back on March 1, reports The New York Times. The documents confirm that the overall project is risky, said Brennan. This information should have been disclosed to the public before the project was approved. Developers and brokers interviewed for the article seemed to agree that Forest City Ratner’s assumptions for its construction costs were too low and its sales prices too high. Bottom line: Ratner’s counting on a continued rising market to bail him out. Regardless of the optimism built into the model, the biggest thing that comes out of the article is that any forecasts for a project this large that occurs over this long a time period have to be taken with a huge grain of salt. I could see this project taking many forms over the years, said RBC real estate analyst Richard Moore. It could go either direction, I imagine. All of this, according to the Atlantic Yards Report, prompts the following questions:
Would Forest City, after getting significant subsidies for infrastructure and the benefit of eminent domain, be required to build its project on any schedule, or could it leave interim surface parking lots indefinitely in Prospect Heights? What profit might the developer actually earn? Should the project be as big as proposed? Is the risk faced more by the public, or by the developer?
By the way, check out this cool photo map that Tracy Collins recently put together.
Official Sees Possible Risk in Big Project in Brooklyn [NY Times]
Murky Times Article on AY Financials [AY Report]