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April 7, 2008
Forest City tells investment analysts: “We still need more” subsidies
Atlantic Yards Report
There have been some indications that Forest City Ratner wants to return to the public subsidies trough, and Norman Oder has confirmed that as he details a Forest City Enterprises, Inc. earnings conference call.
While developer Forest City Ratner initially got the city and state to supply $200 million in direct subsidies for Atlantic Yards, then extracted an additional $105 million from the city, that's not enough.
“We still need more” subsidies, Chuck Ratner, president of parent Forest City Enterprises (FCE) told investment analysts in a conference call last Wednesday. It confirms the clue, as noted in the most recent 10-K filing, that the developer seeks more public support before proceeding with the project.
That might generate pushback from some elected officials. “There has already been very generous public investment,” City Council Member (and Brooklyn Borough President candidate) Bill de Blasio recently told the Brooklyn Paper. “I don’t see how we can go any farther.”
Chuck Ratner's comment further undermines sports economist Andrew Zimbalist's unwarranted prediction, in his FCR-commissioned "promotional study": Although the MOU [Memorandum of Understanding] refers to the possibility of additional optional contributions from the city and state, it seems unlikely that such payments would be made and, in any case, it would be entirely speculative to assign a dollar figure to them.
Additional contributions have already been made, and now we know more will be requested.
Oder goes on to give an in-depth review of the conference call that covered several topics, including how Forest City portrays delays in the project due to pending lawsuits, arena financing and confidence in being able to wring more subsidies for Atlantic Yards out of the City and State. It's well worth a read.
Posted by steve at April 7, 2008 9:18 AM