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June 22, 2009
MTA deal revealed: $20M down, 22 years to pay the rest; smaller yard may save FCR $100 million; some skeptical about rush
Atlantic Yards Report
Norman Oder fleshes out more details of today's MTA meeting, much of them not previously reported elsewhere.
Here are the highlights of today's Metropolitan Transportation Authority Finance Committee meeting, in which a deal under last-minute negotiation was finally revealed. The committee did not vote; it was a purely informational session.
...Less railyard capacity, savings of $100M?
The permanent railyard, instead of having nine tracks with capacity for 76 cars, would have seven tracks with capacity for 56 cars. While there would be several improvements, it still would be less capacity than the previous iteration of 72 cars.
The new railyard would be valued at $147 million, while MTA Chief Financial Officer Gary Dellaverson said the previous iteration was worth $240-$250 million.
(That issue's murky, since FCR valued the railyard at $182 million and the package of improvements at over $300 million. MTA spokesman Jeremy Soffin explained afterward that the MTA never independently costed out the original yard construction, but said he believed FCR increased its estimate as construction and oil costs went up. That's plausible, given that the cost of the project itself rose from $2.5 billion to $4 billion.)
The initial 2005 RFP noted that the Vanderbilt Yard could store up to 72 cars and that the yard "is contemplated to provide addition storage to accommodate the 40% system-wide fleet expansion in 2009 through 2012, which would cause it to be used 24 hours a day."
Previously, a nonbinding letter of agreement between the MTA and the developer stated that FCR would produce a yard with nine tracks or an alternative configuration "that does not reduce yard/station capacity or functionality."
Temporary railyard lingers
The temporary railyard, which was once supposed to last 32 months after construction, could now last six years and eight months, or 80 months. It would have capacity for only 42 cars.
Rest of AY not guaranteed
After building on the arena block, Forest City Ratner could get out of the deal by paying the MTA $86 million, which could pay for a less elaborate permanent railyard with the same capacity.
MTA officials said they were focusing on getting railyard improvements and transportation improvements--notably a new entrance to the Atlantic Avenue/Pacific Street subway stations. They would not guarantee that a platform over the central and eastern segments of the railyard site would be built.
Some skepticism
With an MTA board meeting set for Wednesday, and a widespread belief that the board will approve the proposal, some board members wondered why they had only 48 hours to digest such a complicated deal.
The answer: the deal must go forward so Forest City Ratner can meet end-of-the-year deadlines to have tax-exempt arena bonds issued.
Posted by eric at June 22, 2009 3:43 PM