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June 22, 2009
Ratner To Pay $180 M. Less Upfront For Atlantic Yards
NY Observer
by Eliot Brown
In the world of public-private real estate deals, the word “renegotiation” has been popping up a lot lately.
The latest installment came early Monday afternoon, when the Metropolitan Transportation Authority announced a revised plan for the Atlantic Yards project on M.T.A. land in Brooklyn, for which the agency was once promised $100 million upfront and a $250 million new rail yard.
Developer Forest City Ratner, which intends to build a basketball arena for the Nets and thousands of apartments at the site, has renegotiated a deal with the agency to the point where it pays about $180 million less, at least at first.
Forest City would build a new rail yard for about $150 million with one-fourth less capacity than planned, and pay $20 million upfront. Over the next 22 years, according to the agreement, the developer would give payments worth $80 million in today’s dollars to the M.T.A.
NoLandGrab: The most amazing thing about the massive MTA giveaway is that the MTA actually has Forest City by the balls. The developer owns an albatross of an NBA team that loses some $30 million per year and is most likely worth less than what Forest City paid for it. The only way they can salvage that bad investment is to move the team to a new arena in Brooklyn, and the only way they can do that is if the MTA sells Ratner the railyard and the ESDC seizes other properties. Ratner needs the MTA way more than the MTA needs Ratner.
So why, then, does the MTA act like Ratner has them by the balls?
Posted by eric at June 22, 2009 5:41 PM