AY Financial Docs: The Morning After
The lack of coverage and analysis of the Atlantic Yards financial documents released yesterday is pretty astounding. Radio silence from the Times and the Daily News, Metro mentioned it at the end of an article about a different aspect of Yards, and The Post wrote a reasonably in-depth article about what the docs revealed but…
The lack of coverage and analysis of the Atlantic Yards financial documents released yesterday is pretty astounding. Radio silence from the Times and the Daily News, Metro mentioned it at the end of an article about a different aspect of Yards, and The Post wrote a reasonably in-depth article about what the docs revealed but held off from weighing in on their usefulness or credibility. The Sun was the only paper that delved a bit into the response of critics of the project, even editorializing that “there does not seem to be enough information to make an accurate estimate of Forest City Ratner’s return.” This is the same conclusion that David Smith, an affordable housing expert in Boston, came to when Norman Oder presented him with the documents. “These cash flow schedules are like a Japanese landscape watercolor; fascinating and evocative in their own right but only lightly drawn, he wrote in response. They make one hungry for more detail, without which it is impossible to have a properly informed opinion about either the expected profit the developer may make relative to the risk, or whether the public is receiving fair public benefit for the public resources contributed.” Oder also noticed that the projections include more affordable units in Phase 1 than initially indicated by the City Planning Commission but qualifies that by pointing to the footnote that says, “For discussion purposes only. Actual results may vary.
Three Pages of Mystery [Atlantic Yards Report]
Critics Deem Atlantic Yards Documents Insufficient [NY Sun]
Ratner Nets Brooklyn Bonus [NY Post]
The Jackhammers Begin [Metro]
Photo by lachance
“Choke points, arenas, buildings, landscaping, lights, people… all sounds good to me. Much better than the open trench there now”
Shhhhhhh mums the word on Eminent Domain.
Hi,. I own a house in the area. I am happy that the Atlantic yards is coming,
Thank you.
Agreed, 3:20PM. “Community input” is euphemistic for a bunch of rich NIMBYs intolerant of any vision deviating from their own.
Let’s see – do I want a multibillion dollar investment in my neighborhood, especially in a location that looks, as the picture shows, like Iraq right now?
Choke points, arenas, buildings, landscaping, lights, people… all sounds good to me. Much better than the open trench there now.
Is this developer qualified? Well, he is building the Times building with another prominent architect and has had worked on big projects in Brooklyn before. The City is supporting him and the state agreed to sell the land. So I guess he is qualified.
There probably will be some rumbling by opponents in the neighborhood, but there always is – for decades people in Brooklyn Heights have been against the building of a park on the old piers, so it’s only to be expected. Regardless of what anyone wants to build, there is always a committee with an agenda that excludes that particular kind of development. There will be demands for “broad community involvement”, but really that is only a way for the most vocal people in the committee with the agenda to make sure that THEIR opinion is heard. In any case, you can’t build buildings designed by a committee – look at the new WTC.
Typical development IRRs for a project like this are in the 18 to 20% ballpark, not 9%. Something not right here.
Bob, lets say net sq ft is 70% of gross. Thats makes the construction cost, $1.041 billion. divided by 2 million square feet is $520/ sq ft cost. Is that more in-line?
Interesting Sherlock, although costs are typically on gross sqaure feet, whereas sales are on net square feet (you can’t sell the hallways and lobbys). $750 a sf on costs is a bit on the high side, especially with the land costs that he has.
Even though its smoke and mirrors, a little forensic accounting fills in some of the missing pieces.
According to the doc’s, Ratner will develop ~ 2 million sq ft of Condos. In the footnotes, it says that the net equity reflects $1,041 million of condominium construction loans @ 70% LTV. This works out to $743.5/sq ft for construction.
$1,041/.7 => $1,487. $1,487 million contruction costs/2 million ft sq =>> $743.5/sq ft.
That seems like a high figure for construction costs. How much are the planing on selling these? @ $750/sq ft cost and a 20% profit margin, thats $900/sq ft.
On a separate note, the city stands to reap a financial windfall. 2 million sq ft of property priced at $900/sq ft is approx $1.8 billion of taxable property via property sales tax, transfer fees, recording fees, etc.
10:35 AM – Can we be horrified by genocide, war, etc AND be unhappy that our tax dollars are being used to make one person very rich while potentially destroying a community? Don’t you think the human mind has the capacity to think that this development is being done all wrong and, at the same time, agree that the world has bigger problems to worry about.