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June 6, 2009
Daniel Goldstein of DDDB Attends Forest City Annual Meeting
Develop Don't Destroy spokesman Daniel Goldstein attended yesterday's Forest City Enterprises' annual meeting to ask questions about the status of the proposed Atlantic Yards project. It makes sense to travel to Cleveland since state officials here in New York keep much about the project a secret.
Atlantic Yards Report, DDDB’s Goldstein goes to annual meeting in Cleveland, publicly asks Forest City questions, gets shrugged off
Goldstein was the first and only questioner. He spoke respectfully but his words were not those of a happy investor but of a company critic. (Had he been speaking at last Friday’s oversight hearing, supporters orchestrated by Forest City Ratner would have quickly shouted him down.)
“My name is Daniel Goldstein. I am shareholder. Thank you for allowing me to speak,” he said, noting he’d have a comment and then some questions. [Goldstein bought a few shares earlier this year to be able to attend.]
Forest City, he noted, is losing some $30 million a year owning the New Jersey Nets. The AY project is being redesigned, faces new political approvals, and faces a “staunch and widespread opposition.” (Well, it also has a lot of political juice.)
He cited ongoing litigation, diminished political support, and an “extremely challenging economic environment for an $800 million arena and 6400 housing units.”
Yesterday, he noted, it became official that architect Frank Gehry was no longer designing the arena, thus raising questions about the $400 million naming-rights deal with Barclays and thus the arena revenue model.
Forest City doesn’t own the land it needs or have the financing it needs to start the arena, he pointed out. “Yet the company claims it will finance the project, break ground and open the arena in 2011,” Goldstein said, suggesting that losses will continue to mount.
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Forest City has an end of year deadline for tax-exempt arena bonds that would save the developer at least $150 million, Goldstein said, then offering questions:
- Given all of these challenges, can you let Forest City shareholders know what contingencies you have if you can’t break ground in 2009 and can’t open the arena in 2011?
- And why has Forest City chosen this particular project, “fraught with so many major obstacles,” as the only development to begin vertical construction this year?
FCE Co-Chairman Albert Ratner, on the webcast, seemed nonplused. “The company does believe that it will start the project during this year,” he said. Then, he calmly evaded the rest of the questions by claiming that ongoing litigation precludes further discussion of the issue.
Of course ongoing litigation did not deter an announcement about Gehry yesterday.
Even if construction begins in this calendar year, Forest City can’t open the arena in 2011—Ellerbe Becket arenas take 27+ months to build—so that’s a question that should be asked again and again of those promoting the project.
The Plain Dealer, Atlantic Yards opponent, Daniel Goldstein, shows up at Forest City Enterprises' annual meeting
Executives at Forest City Enterprises Inc. got a bit of a surprise Friday when the most vocal opponent of the company's Atlantic Yards project in Brooklyn, N.Y. showed up at the annual shareholders' meeting.
But an exchange between Daniel Goldstein and Forest City Co-Chairman Albert Ratner was short and polite, doing little to detract from the meeting's generally upbeat tone. Goldstein, whose apartment sits in the path of the project, raised questions about Forest City's ability to pull off the $4 billion, 22-acre development.
Ratner responded simply: Forest City believes it will start the project this year, beginning with a new arena for the New Jersey Nets basketball team. Then, citing outstanding litigation, he ended the conversation.
Posted by steve at June 6, 2009 6:31 AM