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March 15, 2012
Forest City Enterprises executives talk at property conference: little apparent change in amount of contractually obligated arena revenue
Atlantic Yards Report
Forest City Enterprises President/CEO David LaRue and Executive VP/CFO Bob O'Brien participated in a roundtable presentation yesterday at the Citi 2012 Global Property CEO Conference in Palm Beach, FL. It was open to listeners on an audio link.
One question raised by their presentation is how much revenue is committed to the Barclays Center arena, built and (in the majority) operated by subsidiary Forest City Ratner. Contractually obligated income will represent 70% of the total revenue of the arena, O'Brien noted. "Of that 70%, we have more than 50% signed and leased today."
Maybe he was just being casual, but the number isn't too impressive. LaRue said in December, “Approximately 56% of forecasted contractually obligated revenue for the arena is currently under contract,” he said. “This is flat with what we reported at the end of the second quarter, but we expect activity to regain momentum once the NBA season starts.”
And it appears somebody forgot to send the CEO the memo about maintaining the fantasy that the Barclays Center could be home ice for an NHL team.
One slightly contentious question was "why didn't you build this for hockey?" The hockey Islanders, whose lease with the Nassau Coliseum, is up in 2015, are talking with the Barclays Center owners, but a good chunk of seats would have to be eliminated to fit a hockey rink, making it the smallest NHL arena.
"The strategy centered around clearly the basketball team we owned at the time," LaRue said, omitting the need to save money. "The design is specifically for basketball, the sight lines, angles of the seating... We did not have a commitment form the Islanders, to say, Boy, I'd like to be there. We knew we wanted to create a venue that was going to be Class A, and the best use for what we had, and that was for basketball."
Posted by eric at March 15, 2012 12:45 PM