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September 1, 2008
Forest City in the News
San Francisco Chronicle, Oakland's two summers
Forest City's white elephant in Oakland stands as a cautionary tale for those who support demolishing historic structures that stand in the way of sweeping urban renewal:
[Oakland Mayor Ron] Dellums can't be blamed for the downtown Forest City development disaster, either. It should be named Ghost City.
This white elephant was financed to the tune of tens of millions of dollars by people who couldn't foresee that the housing bubble would burst. According to the Oakland Post, tenants can't pay their mortgages, and the ambitious project, for which two historic landmarks were sacrificed, might remain incomplete.
NoLandGrab: When this kind of stuff happens to Forest City in Brooklyn, New York City and State does its part by relocating government agencies into the flagging projects.
The Cleveland Plain Dealer, Gold-based lease could cause million-dollar rent hike for Forest City Enterprises
Forest City has benefited from of all sorts of land deals that result in a windfall, many of which are taxpayer-funded. This time the tables are turned:
Since 1982, the real estate giant has leased land beneath part of the Halle Building, a former Euclid Avenue department store of which Forest City is the majority owner. The ground-lease continues a contract signed in 1912, when the Halle brothers inked a 99-year deal to rent the property and expand their store on top of it.
The lease contained a "gold clause," a feature of real estate contracts that allowed a landlord to base his rental rate on the price of gold. The clauses were once a common way of accounting for inflation and protecting landowners in long-term deals.
For more than two decades, a Forest City entity called S&R Playhouse Realty Co. paid $35,000 a year to rent the land, based on the price of gold in 1912. But in 2006, a New York investor snapped up the land and demanded more rent.
Forest City and the new landowner, an investor named Stuart Venner, have been arguing in court ever since about whether the gold clause is enforceable.
Wednesday, the 6th U.S. Circuit Court of Appeals in Cincinnati ruled that, yes, the clause still applies.
Dayton Daily News, Republicans grapple with Gustav
Atlantic Yards developer Forest City sponsored Sen. Voinovich's impromptu fundraiser for potential victims of Gustav:
Ohio Republicans who came to town for the Republican National Convention found themselves dealing with the specter of a hurricane that may yet devastate New Orleans not three years after the Bush administration was criticized for not wisely handling Hurricane Katrina.
A paddleboat cruise on the Mississippi River hosted by Sen. George Voinovich, R-Ohio, became an impromptu fundraiser for those who will be flooded if the hurricane hits land.
...
The DeWines gave $1,000 and passed out pledge cards for other Republican delegates. The sponsors of the Voinovich event - First Energy, the American Chemistry Council, Abbott and Forest City Enterprises - promised to match whatever Republican delegates raised.
New Haven Register, Winchester project on track; hotel plan slows
Forest City's proposal in New Haven is still in talks, which in the current real estate market qualifies as being "on track."
Abe Naparstek, director of development for the Forest City Residential Group, said his company continues its due diligence in reviewing the massive Winchester Repeating Arms site in Newhallville for conversion to a residential-retail complex.
Naparstek said he hopes to ink a development deal with Science Park Development Corp., owners of the Winchester building, in the next few months, and is scheduled to meet with the Dixwell and Newhallville management teams in October to talk specifics of the project.
...
Naparstek, whose Ohio firm has considerable experience in converting landmark buildings to new uses, said they were making progress in reviewing the 17 structures on the site bound by Winchester, Munson and Mansfield streets."There aren’t any roadblocks, but this takes time," Naparstek said of the project.
A remedial action plan already approved by the state Department of Environmental Protection for environmental cleanup by the Olin Corp. and U.S. Repeating Arms Corp., the previous owners, would bring the site up to a industrial/commercial standard. Forest City will invest to clean it further to allow housing.
Originally, Forest City hoped to report back to the affected neighborhoods by this month, but that has now been extended until October.
Naparstek said his company has gotten "really positive reaction" from the state historic preservation office as it looks to secure federal tax credits for the project.
Posted by lumi at September 1, 2008 6:24 AM