December 27, 2006

Ratner's profit likely would exceed IRR, but the public's still in the dark

Atlantic Yards Report

So how much profit would Forest City Ratner make? Remember, a real estate expert consulted by New York Magazine estimated 25 percent, though he didn't have enough figures to be certain.

Two things are clear, however. First, the "internal rate of return" (or IRR) figures in the KPMG audit commissioned by the Empire State Development Corporation don't tell us anything about Ratner's profit.

Second, the public still doesn't know whether this is a good deal or not.

Norman Oder takes the KPMG audit to a professional, who leaves us with two outstanding questions:

One, have public resources been adequately protected in the sense of public officials or administration officials getting good value for money going in? Two, even assuming they have relative to this transaction, is this a good use of money relative to other things those public resources could be used for?"

Learn what a "development fee" is, which could factor into the developer's profit margin, a number that is a closely guarded secret.


Posted by lumi at December 27, 2006 8:14 AM