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November 13, 2009
New Doubts About Atlantic Yards Financing as Deadline Approaches
NY Observer
by Eliot Brown
Here's a must-read article summarizing all the loose threads that Forest City Ratner must somehow knit together in the next seven weeks if its Atlantic Yards project is to become a reality.
On Sept. 9, Bruce Ratner, the powerful developer scrambling to start building a new Brooklyn basketball arena for the Nets, gave a prediction: The credit ratings agencies would deliver ratings on about $700 million in bonds for the arena by the end of the month. The ratings are a necessary precursor of financing the arena, an act that must be finished by Dec. 31 to meet an Internal Revenue Service deadline.
On Sept. 30, still with no ratings, Mr. Ratner, chairman of development firm Forest City Ratner, updated the timetable: The bond ratings would be done by mid-October.
It's now mid-November, and the word remains the same from the project's backers: The bond ratings are still at least a week off--hopefully.
As the repeated missed internal schedules suggest, the project is running into trouble at the ratings agencies.
According to multiple people briefed on the situation, the agencies have been pushing back against Forest City in its attempt to get the arena bonds rated as investment grade (BBB-) or better, causing new concerns for the project. (Forest City's representatives expressed confidence they will receive the needed ratings.)
This significant hurdle comes as the countdown clock ticks. Loudly.
NoLandGrab: While things may look bleak for the project's future, Ratner's Goldman Sachs banker expresses confidence, and Atlantic Yards' six-year history has demonstrated that Ratner often manages (with a lot of help from his office-holding friends) to pull a rabbit out of his hat.
Posted by eric at November 13, 2009 12:57 PM