January 18, 2009
Atlantic Yards still just an artist's rendering
Simply waiting for the economy to get better could prove costly to Forest City. It has to move the project along if it is to meet a year-end deadline to take advantage of tax-free bonds that would reduce borrowing costs by at least $100 million. Right now, it is attempting to renegotiate or extend a reported $152 million loan due next month and is scrambling to lower the cost of the arena, which has ballooned 40% in two years, to nearly $1 billion. Also, if construction doesn't begin by the summer, it is unlikely the arena will be ready by Forest City's targeted completion in 2011.
Company executives told local elected officials last month that its bank, Goldman Sachs, suggested it cut the cost of the arena to ease the path to financing. Its current $950 million price tag is nearly double the cost of other arenas built in the United States, according to Sports Business Journal.
The $100 million-plus savings on bonds that end-of-year deadline seems crucial, though I wonder if it could be extended.
The 2011 completion date is extremely unlikely, given that construction must begin, according to Bruce Ratner's 30-month schedule, by May 1, and, by the Empire State Development Corporation's 32-month schedule, by March 1.
Neither is tenable. Yes, it's possible that conditions might allow for a speed-up, but everything else construction-related has taken longer than anticipated. We should be talking 2012 as a more likely best-case scenario.
Posted by amy at January 18, 2009 9:23 AM