Ratner on The Future of Atlantic Yards
The Real Deal has an extensive profile of Bruce Ratner focusing on how the chairman and CEO of Forest City has dealt with the flack he’s received over Atlantic Yards as well as his firm’s assertions about how the future of the project is on track. There are no revelations about the (vague) construction timeline…
The Real Deal has an extensive profile of Bruce Ratner focusing on how the chairman and CEO of Forest City has dealt with the flack he’s received over Atlantic Yards as well as his firm’s assertions about how the future of the project is on track. There are no revelations about the (vague) construction timeline for AY beyond the arena, but these are some points of interest from the horse’s mouth:
-Ratner on the future of the project’s residential construction: “We spent a lot of equity on the land. And we did this project for the housing as much as—if not more than—[for] the arena. It’s one of the best locations left in New York City for housing, and it’s ready to go.”
-Forest City’s MaryAnne Gilmartin says the company intends to “send contract documents out to bid” on both a modular and conventional design for the first residential tower in the latter half of the year.
-Regarding the arena’s profitability, Ratner says it “will generate annual net income of about $110 million to $120 million, cost $30 million to operate, and require about $45 million to $50 million a year to pay off financing, leaving the company with about $35 million a year in profit—which will generate a roughly 10 percent return on the $350 million invested by Forest City to build the stadium.”
Ratner’s Refute [TRD]
Photo by Tracy Collins.
10% return (that will grow over time) is actually pretty damn good, especially since he didnt go into AY for the Arena (he needed the arena for the political support and to help justify ED) – the profit will be in the residential housing units.
10% return on the arena component of the site seems pretty generous. Its working out to be a risk-free investment for Ratner. In today’s financial climate, where else can a billionaire earn 10% risk-free?
Agreed DIBS, 10% ROE isn’t all that attractive.
And the return would be even lower but for the government funds doles out to subsidize this project, money that clearly the state and MTA have real need for at this point.
Atlantic Yards – shouldn’t have been built based on economics, shouldn’t have been built based on impact to the neighborhoods, and shouldn’t have been built with government dollars. Period.
“pretax” return of 10% is not compelling.
of course, take his numbers with a grain of salt.
how the heck are you supposed to measure the roi on the subsidy. that’s dumb. of course, it’s a roll of the dice that the future tax revenue and *improved* locale will generate direct and indirect benefits.
you either buy it or you don’t. i’ve observed that most around here do not.
10% Return on Equity isn’t all that attractive.
>will generate a roughly 10 percent return on the $350 million invested by Forest City to build the stadium
Nice number. Awaiting word on the ROI on taxpayer’s multi-million $ subsidy.