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June 11, 2008
Forest City in the News
The Express Times, Decline of Summit a mixed blessing
Forest City walks away from a project in Bethlehem Township.
It was envisioned to be a new center for the township with more than 1 million square feet of retail space and hundreds of homes for various income levels.
Now after six years and more than $20 million in planning costs later, the Summit Lehigh Valley project at Route 33 and Freemansburg Avenue is no more.
Forest City hoped to continue pursuing the project, but its option to purchase the land from owner Elaine Emrick expired and it was unable to secure an extension, said Jeff Linton, vice president of corporate communication for Forest City. Emrick did not return a call for comment Friday.
The project stalled because of the housing market conditions, a slowdown in the retail industry and delays in the public infrastructure process, Linton said. Forest City and other nearby developers hit a snag over sewer service before the township and the city of Bethlehem reached an agreement last year.
The Cleveland Plain Dealer, Forest City's loss widens in first quarter
A $21.5 million write off for the project in Bethlehem Township and the increased carrying costs of the money-sucking New Jersey Nets put a big dent in the Forest City balance sheet;:
A dropped property deal and continued losses on the New Jersey Nets basketball teamed dragged down Forest City Enterprises during the first quarter.
The mega-developer, based in downtown Cleveland, reported earnings after the market closed Thursday. The good news: Revenues jumped 14.6 percent, compared with the same quarter a year before. The bad: Losses widened to $40.3 million -- 39 cents a share -- during the three months that ended April 30. That compares to a $17.2 million loss, or 17 cents a share, during the first quarter of 2007.
It's not unusual for Forest City, which buys, sells and develops property, to see wild swings in its quarterly earnings. A significant property sale can boost profits, while -- in the case of the recent quarter -- abandoned development plans can mean big losses.
...
"We prudently abandoned the project and have written off the related costs," Charles Ratner, Forest City's president and chief executive, said in a news release. "We are well aware of the risks inherent in the real estate development business, even as we continue to seek new opportunities."Forest City also lost money on its 22 percent ownership stake in the Nets, for whom the developer plans a new arena at its controversial Atlantic Yards development in New York City. The team's total money losses did not change significantly from the beginning of 2007 to early 2008, but Forest City shouldered a greater portion of those losses during the recent quarter, said Michael Lonsway, vice president of strategy and investment.
City Limits, IN FAR ROCKAWAY, PRETTY BEACH MEETS HOUSING BUST
An article about the tortured history of development in the Rockaways contains this bit about a past Forest City Ratner proposal:
To revive the local economy, community and city officials tried for decades to lure private developers to the Arverne Urban Renewal Area, which was under the authority of HPD. Two major proposals were forwarded in the 1980s and 90s: first a Forest City Ratner project to build 10,000 condo units on the beach collapsed under its own scale; then a Toronto-based developer planned a massive sports and entertainment complex, Destination Technodome, that would have created thousands of jobs but was scuttled because of poor transit options. Both plans came in an era of stagnant real estate development across the city, when developers seemed to abandon lots more frequently than develop on them.
Columbus Dispatch, Conventional decisions
Forest City Enterprises provides a cautionary tale for an article comparing Columbus, OH's convention center amenities to other cities:
On the other hand, Pittsburgh and Columbus both lack enough full-service hotel rooms adjacent to the convention center. Plans in Pittsburgh for a hotel attached to the convention center have been stalled for several years as the interested developer, Cleveland-based Forest City, envisions something smaller than the 1,000-room hotel VisitPittsburgh wants there.
Posted by lumi at June 11, 2008 3:44 AM