April 18, 2009
Time running out for Atlantic Yards? Maybe not yet, but AMBAC going "junk" doesn't help
Atlantic Yards Report
Norman Oder notes the discussion of the proposed Atlantic Yards development on yesterday's Brian Lehrer Show. Problems facing the development include a downgrading of AMBAC, the corporation that originally promised to back bonds issued by Bruce Ratner to purchase the MTA's Vanderbilt railyards. Featured in this radio segment were WNYC reporters Bob Hennelly and Matthew Schuerman.
"Time might be running out for Atlantic Yards," Hennelly said in the lead-in to Schuerman's segment.
Scheurman said, "The New Jersey folks, it seems, are just positioning themselves to pick up the scraps that Brooklyn leaves behind." He noted that the Nets say they're moving to Brooklyn by 2011, but pointed out that the developer has steadily been promising a move.
"There will be a point where if they don’t complete the Brooklyn arena or get it into the ground, they may well decide to evaluate other options," he said.
There's an Internal Revenue Service deadline this December to issue tax-exempt bonds that could save Forest City Ratner $150 million, Schuerman said. (I've estimated $165 million, but all numbers are approximate.)
Schuerman was asked what was keeping the bonds from being issued. First, lawsuits must be cleared. But even if they are, developer Bruce Ratner "might not be able to issue the bonds in this economic environment as it is. When he first bid on the MTA railyards, he submitted a letter of interest from the AMBAC corporation, saying AMBAC would back these bonds, but AMBAC has been downgraded to junk status… all the institutions he was relying on to finance the arena have really come undone, because of the banking collapse."
Posted by steve at April 18, 2009 7:20 AM