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December 10, 2009

FCE executives say Atlantic Yards is on schedule, bond details, sale next week

Atlantic Yards Report

Norman Oder listened in on today's Forest City Enterprises earnings call.

In a conference call today (webcast) with investment analysts, Chuck Ratner, CEO of Forest City Enterprises, parent of Forest City Ratner, expressed optimism about the Atlantic Yards project and said more details on the terms for the arena bonds would emerge “by the end of next week.” Another executive said bonds would be sold by early next week.

“In summary, we have several things yet to accomplish, and we fully expect to close this project by the end of the year,” Ratner said. “We are in a position to close because we have achieved some major milestones. The first was a letter of intent with an affiliate of Onexim Group, an affiliate of an international private investment fund, to create a strategic partnership for the ownership of the Nets and the development of the Barclays Center arena. This influx of new global capital is strong sign that others also see a value creation opportunity that we see in this great project.”

Other might say that Russian tycoon Mikhail Prokhorov—a big basketball fan--got a very good deal.
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Capital investment

FCE CFO Bob O’Brien at one point acknowledged that there is a significant investment that needs to go into Atlantic Yards as it goes forward.

An analyst asked, "Can you give an update on the arena... and expectations of capital investment in the project?"

Forest City Ratner President Joanne Minieri responded, “As Chuck mentioned, we are anticipating to close on the Atlantic Yards and the Brooklyn arena by the end of this year. We had always anticipated the necessary equity, which would in the neighborhood of around 200 million dollars, primarily in connection of the land and infrastructure… I think, overall, all of our targets are being met, and we continue to proceed accordingly for the year-end close. We’re out in the market, as you probably heard, on the bonds… and we expect to have them sold early next week. So, with that, I think, overall, the project is pretty much moving as we planned.”

Click through for some Forest City obfuscation on its missed Atlantic Yards mortgage payment and the big arena-naming-rights price cut.

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NoLandGrab: Yup, the "project is pretty much moving" as Forest City planned, with the arena on target to open in 2006 2007 2008 2009 2010 2011 2012(?).


Additional coverage...

Crain's Cleveland Business, Forest City Enterprises CEO says market's worst 'may be behind us'

While noting challenges aplenty face real estate companies, Charles Ratner, president and CEO of Forest City Enterprises Inc. (NYSE: FCEA, FCEB) said today in a conference call with analysts that “the most difficult stretch may be behind us” in adapting to the recession and real estate credit crunch.
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While some economic reports show the recession ebbing, Mr. Ratner said that is “difficult to see” in the real estate business. He noted the company was unable to sell a portfolio of properties it was marketing to increase its cash position.
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The company also is pursuing federal stimulus funds for energy projects; allocations of federal New Market Tax Credits, which give investors a tax credit for investing in low-income areas; and public infrastructure projects that benefit its properties, such as a new interchange at its Stapleton mixed-use project in Denver.

Posted by eric at December 10, 2009 6:59 PM