New Docs Suggest AY Project Riskier Than Thought
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…
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]
Tish tish whats the dish pull down your pants and make a pish!
Ratner didn’t take all of the risk. We took 50% of the risk – $2 billion on a $4 billion project. Do New York tax payers stand to get 50% of the upside? No, of course not. That’s why it’s called corruption.
Eryximachus, I have no doubt that AY will be economically successful for the owners of AY – we New Yorkrs are footing half of the bill. If we underwrote half of most ventures in NYC the odds of economic success of the venture would be appropriately optimistic., The issue is not whether AY will be economically successful for Ratner – it will, I’d stake my life on it. The issue is whether it’s worth $2 billion to NYC taxpayers. It won’t be. And no amount of faux econmic commentary can change that.
“How can a high density development above a major transit hub be anything other than positive?” – Me, I’d ask what the TOTAL cost of the development is before I claim it’s worth the money.
Is this Communist Russia? Who gives an fuck how much Ratner makes on this project? He took the risk and should be handsomely rewarded! This is the United States of America and the last time I checked this is a capitalist society. You expect different? Move.
I don’t care who builds AY. I just want instant gentrification and the utter displacement of anyone who doesn’t want to make the nabes east of Flatbush better. I don’t want to make additional housing for the poor in FG, CH and PH. The poor we do have is too much already. They add no value and simply suck the blood out of every community. KUMBAYA my arse people! Fruit salads don’t work in the real world!
The opposition is using the affordability component of this project to their own detriment. What happens if Ratner turns around and makes the ENTIRE project low income? Then we’ll have the Marcy project on steroids!! WTF?!?! I’d rather have 100% luxury housing then 40% low to middle income housing. Low income people are like roaches, before long they will take over the entire complex and make the surrounding neighborhoods unbearable.
WORD OF CAUTION: BE CAREFUL FOR WHAT YOU WISH FOR!!!!!!
Clearly it’s the 11th hour and AY opponents are getting pretty desperate. This is perhaps the dumbest story ever published in the NY Times. The editor should be fired.
mr. DumbDeal, Brennan’s release and the Times article, if you read it carefully, do not who that Ratner is making a pittance. Why would Forest City Ratner embark on a project that makes them a pittance, i don’t think Forest City Enterprises’ shareholder would be too pleased to find out that’s what they’re up to.
Good point, JoJo 1:27. If Ratner makes a killing, it’s reason to complain. If Ratner makes a pittance, more reason to complain. Opponents will never be happy unless the project gets killed, which, of course, would never happen at this late stage. So, let us not allow Brennan’s press release to distract us from the most important point: the project has been approved and the opponents are failing miserably in court.
D-O-N-E-D-E-A-L!!!
Anon 4:06:
The market makes the decision. Just as happened in Harlem a century ago, developers built too much “luxury” housing and there was no market for it – and thus the previously underserved black population got access to great housing that has lasted to this day.
The lack of housing affordability is a direct result of the city’s oppressive zoning code that limits density and makes it extremely expensive to build housing. Rent stabilization and rent control also makes it difficult and expensive to replace obsolete, low-density buildings with newer higher-density buildings.
This is not the Soviet Union – willing buyers and sellers determine how much profit someone makes in the market. Until the city changes their laws such that demand can be satisfied, we will continue to have high prices. Once again, the people at the AY report prove they are nothing but rich communists.
I have a great way to solve the housing crisis, we should seize the townhouses of every rich liberal in the city who owns one and convert them into rooming houses for the poor. Your average townhouse can easily accommodate 12+ studio apartments.
The poor pay higher prices because these fools have obscenely large homes.
Sterling Silver:
Automation works is trains can be run closer together, and thus more trains can be operated simultaneously. It really has nothing to do with the people, if someone is holding the train doors the system will slow down but it won’t reduce the extra capacity that is a result of running more trains. Even now, it is technology that alerts the train conductor doors are being held open. The only difference is a computer will keep trying to close the doors until they are clear. It is not unlike your average elevator which works just fine.
Also, I’m not saying the L train is 100% operational. The technology is definitely in a testing phase – but it is coming. I’ve used the North East MRT line in Singapore that is fully automated and it works great. This isn’t particularly complicated technology – it’s just expensive and results in job cuts. There’s no reason to take a Luddite position on this issue though, especially when so much is at stake.
As for the people outside of the subway system, most reports I have read indicate the people don’t want subway service as it will result in higher density. They want to maintain the suburban character of their communities. Are the people of Sheepshead Bay really clambering for an extension of the Norstrand Avenue line? This would seem like the easiest extension.
There are people pressing for express F train service to continue again.
I’d love there to be expansion of service, but that is a whole other matter and the politics involved are intense. It’s totally beyond the scope of this discussion.