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April 20, 2007
Ratner Scrambles for Funding for Gehry-Designed Tower
The NY Observer
"Deeds and Deals"
By Matthew Schuerman
The outstanding issues of financing for another Ratner/Gehry project provides some insight into Atlantic Yards:
Forest City Ratner is looking to compete for some of New York’s scarce tax-exempt bonds to finance a Frank Gehry–designed tower in lower Manhattan.
Here's a breakdown and explanation of the state/city-subsidized financing of Bruce Ratner's Beekman St. tower:
One portion—presumably the top—would be entirely market-rate rentals and could be financed with Liberty Bonds, which continue to be reserved for the project. The middle portion would consist of mixed-income rentals, 20 percent of which would be priced for low-income households. The school would occupy the lowest five floors, along with retail and possibly a medical facility.
In a request filed last year with the H.D.C., Forest City said it was planning to apply for up to $450 million in tax-free bonds that would cover up to 750 of the units in the middle portion of the building. But the developer will have to wait in line for these bonds because the city largely depends on the state for tax-exempt bonding authority. The state has received billions of dollars in requests that it cannot accommodate this year.
“By the end of June this year, the H.D.C. is completely out of volume cap,” said Emily Youssouf, the president of the H.D.C. “[The developers] are trying to figure out their financing.”
Taken together, the $190 million in Liberty Bond financing, which was supposed to underwrite 720 apartments, and the $450 million in 80-20 financing, to cover 750 units, accounts for more than the 920 apartments that Forest City is planning. That means the developer has room to tip the balance toward more or fewer market-rate units depending on the various tax advantages.
Ratner and Gehry have yet to reveal models or renderings of the project. So far this is all that is publicly known:
Rough designs filed with the housing agency show that the tower would have a large five-story base, on top of which a narrow column would rise to 950 feet—the second-tallest building downtown—with small setbacks on the 37th and 49th stories. Public plazas would border the tower on two sides.
Posted by lumi at April 20, 2007 9:09 AM