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January 27, 2010
Despite promise of ten-year AY buildout, ESDC deadlines allow 12 years for Phase 1, 15 years to start platform, 25 years for full project
Atlantic Yards Report
So, what kind of leverage does the Empire State Development Corporation (ESDC) have to get the Atlantic Yards project completed in a decade, as promised in the 2009 Modified General Project Plan and defended in a court hearing last week and in legal documents?
Not much.
The developer faces generous deadlines before damages--hardly painful--kick in, and in several cases the deadlines can be extended. Among the deadlines:
- six years to build the arena
- three or four years to start construction of the first tower
- five or six years to start construction of the second tower
- ten years to start construction of the third tower
- 12 years to build Phase 1 (which can be much smaller than officially promised)
- 15 years to start construction of the platform over the railyard
- 25 years to finish the project (which can be much smaller than officially promised)
The damages Forest City Ratner faces in most cases--less than $10 million for an arena that's up to three years late, $5 million for each of three buildings if they're late--don't represent a lot of money, especially given that the developer just got a cash flow boost of $31 million to buy land.
And while the developer is still supposed to build the promised 2250 units of affordable housing, an Affordable Housing Subsidy Unavailability can be claimed, thus continuing to stretch the deadlines.
...The documents support the wide belief, even among project proponents and state officials, that the project could not be built at the promised timetable. Last April, Marisa Lago, then-CEO of the ESDC, said that the project would take "decades."
...The documents are maddeningly complex, written in legalese with Rube Goldberg-ian formulas, and multiple documents address some of the same issues. So it's certainly possible that some of my analysis is flawed. However, given the absence of any official statement of damages and sanctions, consider this a good first pass.
And the documents in the master closing clearly contradict the 2009 Modified General Project Plan approved by the ESDC in September 2009, which states:
The build-out of the Project is likely to occur in two phases, with the Project elements on the Phase I Site and the Upgraded Yard (collectively, "Phase I") anticipated to be completed by 2014 and the Project elements on the Phase II Site (collectively, "Phase II") anticipated to be completed by 2019.
Posted by eric at January 27, 2010 12:08 PM