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March 14, 2009

Forest City In The News: Forest City Plan In Fresno Ends

Due to a $100 million "financial gap" (the difference between money that Forest City is willing to spend and that the government is willing to hand over), Forest City has canceled its Fresno project. For the moment, businesses in the former project area get a respite from the threat of the use of eminent domain.

Forest City In The News: Forest City Enterprises cancels downtown Fresno project

The Fresno Bee
By Denny Boyles

Forest City Enterprises has abandoned plans for a $300 million project in downtown Fresno that would have brought housing and commercial businesses to an 85-acre area south of Chukchansi Park, the company announced today.

The company has had an exclusive development deal with the city of Fresno since 2004, but was unable to close a $100 million gap in funding for the South Stadium project.

Support for the project was strong on the City Council, which in December agreed to extend its exclusive negotiation agreement with the Cleveland-based developer for six more months.

More coverage, below, courtesy of Atlantic Yards Report, including an indication of why Forest City will continue pushing for Atlantic Yards.

Three months after pledging commitment, Forest City pulls the plug on Fresno projectlink

Though developer Forest City Enterprises (FCE) in December maintained it was committed to a $300 million housing and office project in downtown Fresno, CA, yesterday FCE announced it has abandoned the project.

The key issue, apparently, was the inability to secure state and federal subsidies, despite the developer's effort to make cuts.

...

The city's new mayor, Ashley Swearingin, was no fan of the project, but the real gap seems to be the failure to find $100 million in state or federal funds to fill that budget gap. The Bee reported in December that the six-month extension gave the developer time to pursue state and federal money.

Forest City apparently has no spare cash; just this week reports emerged about the company's effort to sell 15 properties.

There's a subsidy gap for Atlantic Yards, as well. However, New York City, especially Brooklyn, is a core market for the developer, and there's a significant upside to AY--or, at least, the erasure of a significant downside: the massive losses suffered via ownership of the Nets.

Posted by steve at March 14, 2009 8:32 AM