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January 13, 2009

Is Forest City Ratner trying to chintz the MTA on the Vanderbilt Yard replacement?

Atlantic Yards Report

The big news in today's New York Times CityRoom post, headlined Markowitz Calls for Paring Cost of Atlantic Yards Arena [originally: "Paring Down"], is not that Borough President Marty Markowitz, who can be counted on to support anything developer Forest City Ratner decides, thinks it's a good idea to value-engineer (belatedly?) the planned Atlantic Yards arena.

No, it was the penultimate line:
The developer has also talked about building a less expensive railyard as a replacement, according to a state official who is involved with the project.

Well, I'd heard that one too.

Looking at the numbers

Remember, Forest City Ratner claimed that its bid for the MTA’s Vanderbilt Yard was enhanced by the value of the replacement railyard it was to build, saying its bid of $100 million cash plus enhancements was worth $445 million. (Remember, FCR initially bid $50 million cash, before the MTA decided to negotiate exclusively with them, rather than with rival bidder Extell, which bid $150 million cash but didn’t have FCR’s political backing).

This claim was belied by the fact the MTA’s own appraiser calculated the value of the railyard site at $214.5 million including the value of a new railyard.

So now the developer wants to build a less expensive railyard. Shouldn’t that original bid be reexamined?

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Posted by eric at January 13, 2009 6:29 PM