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July 10, 2007
Ratner May Net $30 Million On Sale of Arena Hotel Site
Controversial Developer Will Sell Hotel, Not Build It Himself
Brooklyn Daily Eagle
By Sarah Ryley
PROSPECT HEIGHTS — Forest City Ratner Companies will not be building a hotel within Miss Brooklyn, the flagship building of the developer’s arena and high-rise project approved by the state last year, according to documents obtained by Assemblyman James Brennan.
“FCRC indicated that they will not construct the [180-room] hotel, but will sell the site to a hotel developer,” said a December report on the developer’s business plan performed at the request of the project’s sponsor, Empire State Development Corporation.
At a planned 165,000 square feet, the hotel site could fetch $28.8 million if sold at the high end of the Brooklyn market, according to an estimate by Massey Knakal Realty Services partner Brian Leary. He pointed out that the “unique location” at the intersection of Atlantic and Flatbush avenues has several advantages for a hotel developer.
Develop Don't Destroy Brooklyn had this response:
“Sounds to me like its just another giveaway,” said Daniel Goldstein, who is fighting the use of eminent domain to seize his condo for the development. “Basically, it’s eminent domain being used to give the land to Ratner for free, and then he gets to sell it, which again is pure profit to him as opposed to the state and the city.”
And, as usual:
Representatives of Forest City Ratner Companies did not respond to questions for this report.
Develop Don't Destroy Brooklyn posted this clarification to its response above on its blog:
It appears that $30 million would not be the net profit or "pure profit" for Forest City Ratner. It appears that whatever price the developer sells the hotel for would be gross revenue and the net profit would be the sale price minus the developer's unknown expenses. So, the net profit would be some unknown percentage of the estimated $30 million sale of the hotel square footage. What is clear, just like the entire project, is that there is an enormous private benefit given to Forest City Ratner by the state's override of zoning for the developer's desired density and uses, and the use of eminent domain -- that's on the hotel and most of the rest of the project.
Posted by lumi at July 10, 2007 7:04 AM