« So, Daniel, how was YOUR weekend? | Main | Brodsky: MTA board’s acceptance of Ratner’s lesser offer for railyard would violate its fiduciary duty »
June 8, 2009
Two reasons Ratner's arena switch is fishy: construction costs down and Gehry design impossible; are other costs being off-loaded?
Atlantic Yards Report
SOMETHING FISHY
Atlantic Yards developer Forest City Ratner tries to lay blame for the decision to ditch Frank Gehry's design for a second-class arena on "construction costs," even though, by all accounts, construction costs have fallen dramatically. The project's red herring is smelling fishy:
Forest City Ratner, in its announcement that the Frank Gehry arena design has been traded for a more pedestrian design by Ellerbe Becket, claimed that "rising construction costs impacted the budgets of all developers," and the press and public officials have uncritically repeated that.
Ratner would be saving only about 20%--$200 million on an arena reported at $1 billion or $950 million--so that's fishy, since lowered construction costs should already have taken care of much of that gap.
IT'S THE DESIGN, STUPID
Atlantic Yards watchdog Norman Oder explains that Ratner is currently unable or unwilling to construct the highrises and atrium that were to surround the Frank Gehry arena, which is technically impossible to build as a stand-alone arena. Therefore the decision to go with an off-the-shelf second-class arena design probably had more to do with the inflexibility of Gehry's initial masterplan.
COSTS, THE NEXT BIG SCANDAL
However, when Oder estimates the costs of the new watered-down arena design, he finds that there's still some slack:
Is Forest City Ratner attaching indirect project costs to the arena price tag, thus having them paid for via tax-exempt bonds, which are a cheaper way to raise money?
We need some specifics about the costs of the arena. The ESDC, which is supposed to oversee the project, should explain.
Posted by lumi at June 8, 2009 6:41 AM