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January 29, 2008

Credit whoa?

creditcrunch.jpg News of Bruce Ratner's claims of credit woes in court documents, as reported yesterday in the Post and Atlantic Yards Report, travelled fast.

Here are links from the local media and blogosphere:

Runnin' Scared (Village Voice), TABLOIDED: Political and Sports Battle Royale
From the daily tabloid round-up:

The Post also reports that Bruce Ratner is having trouble raising money for his controversial Atlantic Yards project in Brooklyn.

NY1: Inside City Hall, A Delegate Count Looms As Bloomy Heads To Albany
From the NY1 daily news wrap-up:

Rich Calder reports: “Don't fork over money to reserve seats for the Brooklyn Nets just yet. Developer Bruce Ratner is running into trouble securing funding for his controversial $4 billion Atlantic Yards project, which would bring an NBA arena for Ratner's Nets and 16 skyscrapers with residential and commercial space to Prospect Heights, according to court documents obtained by The Post.”

Gothamist, Lawsuits and Recession Hobbling Atlantic Yards Project

Ratner’s lawyers are warning the court that the lengthy appeal process is putting the project in jeopardy because “the credit markets are in turmoil at this time . . . There is a serious question as to whether, given the current state of the debt market, the underwriters will be able to proceed with the financing for the arena while the appeal is pending.” If the appeal is not quickly resolved, developers “are likely to encounter significant difficulties and cost increases in concluding the bond financing that is essential to the arena's completion,” lawyers argue.

Brownstoner, Is Atlantic Yards Funding in Jeopardy?

An affidavit (see copy on jump) submitted by Andrew Silberfein, Forest City Ratner’s executive vice president and director of finance, sheds some light on the complicated web of financing for the “more than $4 billion project,” which involves having Goldman Sachs serve as the lead underwriter for bonds that will finance the Nets arena’s construction.

DDDB.net, Blogland Looks at Atlantic Yards Credit Crunch

Develop Don't Destroy Brooklyn corralled the early blog coverage.

Curbed, Your Morning Credit Crunch: Will Atlantic Yards Be a Victim?

The Real Deal, Questions raised on Atlantic Yards financing
Here's just the type of paradox that makes you realize that you can't believe what Forest City says:

"The credit markets are in turmoil at this time . . . There is a serious question as to whether, given the current state of the debt market, the underwriters will be able to proceed with the financing for the arena while the appeal is pending." Bruce Bender, a Forest City Ratner vice president, said in a statement that "regardless of the opponents' delay tactics, we will continue to move forward as quickly as possible."

[Um, we can't proceed with financing, but we'll continue to move forward? Give our brains a rest.]

Kinetic Carnival, Will The City Find Investors?

In the end, Ratner may have more to fear from the US's slumping economy than he does from activists like Develop Don't Destroy Brooklyn.

Daily Intelligencer (NY Mag), Neighborhood Watch

Prospect Heights: It looks like Bruce Ratner's worried that the slow process behind various legal challenges to the Atlantic Yards project could have a "chilling affect" on financing for the controversial, $4 billion high-rise project. [Gothamist]

Field of Schemes, Court papers hint at Nets arena finance woes

Take this with a big grain of salt, given that Ratner is claiming it in an attempt to get a lawsuit dismissed - the New York Yankees, don't forget, threatened to move out of the city if a similar legal challenge against their stadium wasn't dismissed. Still, there have been questions about how the softening housing market will affect the project for a while now, real estate experts have questioned both its cost and revenue projections, and Ratner's own finances aren't looking too great right now either. The big question then becomes, if Ratner clears away the lawsuits but can't come up with the cash, does he back out of the whole project, or just the housing component, leaving Brooklyn with just a basketball arena and a really ugly skyscraper?

The Knickerblogger, Ratner Admits Arena Funding In Peril.

They are essentially admitting that the project is financially risky. Why are taxpayers funding it?

Further, if the market is drying up for credit, its a reflection that both the real estate market is cooling and bankers are more temperate about financing questionable projects - if that is the case, then why would Forest City/Ratner want to build? Because WE Pay for it, and WE absorb the risks.

The Real Estate Observer, The (Big) Round-Up: Monday

Forest City Ratner admits it is having problems raising money for $4 billion Atlantic Yards Project. [NY Post]

Streets Blog, Today's Headlines

Atlantic Yards Running Into Financial Hurdles (Post)

Posted by lumi at January 29, 2008 4:40 AM