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January 28, 2008

FCR official: lawsuit casts doubt on arena financing

Atlantic Yards Report

While NoLandGrab has been unable to confirm rumors that the speedy Norman Oder had posted his analysis of this morning's New York Post "exclusive" before the Post had actually published it, it's indisputable that Atlantic Yards Report adds some context and depth to the story:

Is the legal battle over Atlantic Yards having “a chilling affect” on Forest City Ratner’s ability to get financing? That's what a lawyer for the Metropolitan Transportation Authority said more than a week ago, according to lawyers for the 26 petitioners challenging the Atlantic Yards environmental review, though he denied it to the Brooklyn Paper.

Well, that kerfluffle is moot now that an FCR official has said essentially the same thing in legal papers, arguing for an expedited appeal of Supreme Court Justice Joan Madden's decision. (The New York Post has the story first today; the article's headlined COURT TROUBLE: RATNER ADMITS ARENA-FUNDING WOES.)

In an affidavit filed Thursday, Andrew Silberfein, FCR's Executive Vice President and Director of Finance, stated:

As the Court surely is aware, the credit markets are in turmoil at this time. Many lenders and bond insurers are facing financial difficulties, and are becoming much more cautious. It is not clear what the financial climate will be in several months, when the arena bond financing is made available to the public.

Although the decision that was issued by Justice Madden in this case on January 11, 2008 should be helpful in providing comfort to potential investors that there is no significant risk that the courts will annul the approvals for the Atlantic Yards project, 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 before this Court. (Emphasis added)

FCR wants the appellate arguments to be heard by May rather than held over until September; the developer would like to open the arena in 2010, even though the three-year bridge reconstruction clock, which started when the Carlton Avenue Bridge closed January 23, suggests that the earliest would be 2011.

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Posted by eric at January 28, 2008 9:31 AM