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March 22, 2009

The Xanadu story: a reminder about "public authorities largely operating out of public view" and some sobering AY parallels

Atlantic Yards Report

Who can name a development plan that involves back-room deals done between State agencies and a developer, over-optimistic financial assumptions, and deadlines that just keep getting moved further and further back? You say "Atlantic Yards"? That is one correct answer, but the answer I was looking for was "Xanadu".

See the remarkable parallels to Atlantic Yards including this comparison of two struggling developers:

WNYC pointed out that Colony Capital -- the current private sponsor of Xanadu -- failed to make its November payments on a $360 million loan to creditors.

And the Star-Ledger reported yesterday that workers at the Xanadu site "said they were told they were being let go, but a spokesman for the developer, Meadowlands Xanadu, said the project is not being halted," just delayed.

That echoes the mysterious close of work at the Vanderbilt Yard in Brooklyn, which Forest City Ratner blamed on lawsuits but which workers said (I've been told secondhand) was due to cash flow problems. Remember, FCR made virtually no explanation even to the ESDC.

And parent Forest City Enterprises, apparently trying to avoid the fate of a Colony Capital, is selling prime properties to raise cash and is reevaluating the Beekman Tower in Manhattan and may leave it at 50% of its planned height.

link

Posted by steve at March 22, 2009 10:00 AM