July 3, 2009
Forest City Enterprises (FCE.A) Channel Alert: 3.3% Move in 49 Days
FoxBusiness.com
Jul 02, 2009 (SmarTrend(R) Spotlight via COMTEX) ----SmarTrend's proprietary algorithms detected bearish price action on shares of Forest City Enterprises (NYSE:FCE.A) which generated a Downtrend alert on May 14, 2009 at $6.29.
Since the alert, FCE.A has trended 3.3% lower as of today's recent price of $6.08.
SmarTrend is actively monitoring Forest City Enterprises for any change in trend direction.
NoLandGrab: In case folks at Forest City didn't notice, but two of the three related-ads that appeared with this item were for "penny stocks" — ouch!
Posted by lumi at 5:16 AM
June 30, 2009
Read the fine print: Investment analysts in bed with Forest City look positively on post-dealmaking Forest City
Atlantic Yards Report
A New York Observer piece yesterday, headlined Analysts: New Atlantic Yards Deal A 'Significant Positive' for Forest City Ratner, brought highly unsurprising news.
From the report by investment firm Keefe, Bruyette & Woods (KBW):
While many of the details have not been completely outlined publicly, we believe staging a takedown of the land and paying for the air rights portion starting in 2012 is a significant positive for Forest City. While the stretched-out takedown and payments will require a higher total outlay (implied 6.5% annual interest rate) over the 19-year period starting in 2012, this reduces current cash outlays in 2009 and near term. In addition, this means that Forest City's takedown of the additional parcels (or air rights) will be more closely matched with vertical development of stages of the project."
...Who does KBW work for?
Consider analyst McGrath's concern for the public interest, when she chortled with approval when learning that FCR's Beekman Tower would, in the words of Forest City Enterprises executive Bob O'Brien, take advantage of "the beauty of the Liberty Bonds, tax-exempt rates and all market-rate units."
The report also states:
KBW either expects to receive or intends to seek compensation for investment banking services from Forest City Enterprises Inc. during the next three months. During the past 12 months, KBW acted as a manager or co-manager in an offering of equity securities of Forest City Enterprises Inc.That's not an unusual entanglement for an investment firm, but it also gives reason to think KBW isn't inclined to be tough on Forest City.
Posted by eric at 9:33 AM
June 29, 2009
Forest City in the News
The Cleveland Leader, How Hypocritical Can Sam Miller Get Before We Laugh Him Out of Town
Forest City Enterprises co-chairman and Treasurer Sam Miller says he’s willing to donate to the Cleveland libraries if budget cuts are made by the State of Ohio. Sam says that he will donate to keep libraries in poor areas open if the cuts are made.
Cleveland's watchdog journalist Roldo Bartimole explains how, Forest City Enterprises depends on reductions in property and sales tax to keep the company's projects fiscally viable. As these reductions starve local municipalities of the tax revenue used to provide basic services, the budget gap is made up by suckers who pay their full share of taxes, with Forest City occasionally tossing around some bread crumbs.
Associated Press, via CBS2.com, Las Vegas Mayor Losing Support For City Hall Plans
Another Forest City Enterprises politically backed boondoggle may be fizzling out. This time the local unions are against the project:
Las Vegas Mayor Oscar Goodman's visions of a revitalized downtown may be in trouble as he loses support for a new city hall.
A re-imagined downtown with two new casinos, busy office towers and a mass transit line can't happen without a new hall, Goodman says.
...
Goodman is hoping to finance the project using bonds that are based on the city making annual lease payments on the new building. City officials estimated the cost of the city hall at $150 million last year.
...
The plan Goodman backs would give developer Forest City Enterprises a parcel to build a hotel-casino in part for building the new city hall. The current city hall and an adjacent 12 acres owned by the city would then be put up for development.
Posted by lumi at 4:58 AM
June 28, 2009
Where Geography Matters
The New York Times, Editorial
The Times opines against — sort of — the selling of subway-station naming-rights to Barclays.
After five years of trying, the Metropolitan Transportation Authority has sold the naming rights to a subway station. As of 2012 the M.T.A. will add the name Barclays to the Brooklyn station currently known as Atlantic Avenue-Pacific Street.
Yes, Barclays as in the British bank. Or more to the point, as in the British bank that bought the naming rights to the sports arena being built as part of the Atlantic Yards project. The buyer in this case is Forest City Ratner, the developer for Atlantic Yards. It will pay $200,000 a year for 20 years.
We know that is a goodly sum and times are very tough for the M.T.A. But there’s reason to be skeptical about all of this, which probably explains why it took so long to sell even this one.
...The names of subway stations are beautifully utilitarian just as they are, shifting only as rapidly as the streets above them shift. The names of their sponsors are likely to shift with the economic climate, and somehow adding a name like Barclays to what is, after all, a public transit station — in Brooklyn — feels even more dissonant.
NoLandGrab: The Times remains silent, however, on the MTA's sell-out of straphangers for Forest CIty's benefit. And whoops — they must've forgotten that the very same company is their business partner.
Posted by eric at 11:17 PM
June 16, 2009
Résumé Review
Crain's NY Business
by Ware Sykes
Crain's occasionally features a resumé, and some advice as to how to punch it up.
NAME
RENAD JABAJI
OBJECTIVE
A managerial career in construction and real estate development
EXPERIENCE
Forest City Ratner Cos., Manhattan, 2006-March 2009. Project development coordinator: analyzed and assessed subcontractor estimates for Barclays Center, Brooklyn; obtained substantial savings in construction schedules for Beekman Tower, Manhattan; value-engineered foundation and road design for significant savings for Ridge Hill, Yonkers
...EXPERT ADVICE
In the current economic environment, employers are looking for people who can generate revenue and save money. In your cover letter and when you're speaking with recruiters, emphasize that you not only have the skill set they need but that you also have the ability to deliver projects on time and under budget.
link [May require a subscription]
NoLandGrab: "On time and under budget?" The Barclays Center is neither.
And why would Forest City have laid off someone working on the arena three months ago (assuming that's why Ms. Jabaji left)?
Posted by eric at 2:46 PM
June 12, 2009
Forest City in the News
Arizona Daily Star, Gladden Farms buys up debt
The master-planned community Gladden Farms has avoided foreclosure on roughly 625 acres of undeveloped land, buying up its debt from lender GMAC Financial Services at a negotiated price.
Terms of the deal were not disclosed, but Dean Wingert, senior vice president of Ohio-based Forest City Enterprises, its developer, said Gladden Farms paid off its debt at a discount of slightly more than 50 percent, enabling it to commit to finishing the community despite a massive housing downturn.
"We basically paid them less than 50 cents on a dollar than what we owed them," Wingert said. "The foreclosure proceedings have all been canceled, and we have re-committed and re-evidenced our long-term interest in the property."
NoLandGrab: Is there a pattern emerging here? Forest City is seeking to pay the MTA only $20 million of the $100 million it promised to pay at closing for the Vanderbilt rail yard.
San Francisco Business Times, Oakland, Concord Smart Places To Grow
The Greenbelt Alliance, a Bay Area advocate of open spaces and vibrant communities, released a research report called "Room to Grow" in which it outlines specific areas including Oakland and Concord that are ripe for infill development.
Infill development refers to building new structures in places that have already been built out. The idea of making cities more dense has gained significant traction as people look for ways to commute less and have more amenities near home.
...One example is Oakland's Uptown neighborhood where major residential developments like Forest City's Uptown apartments, Signature Properties' Broadway Grand and Essex Property Trust's The Grand have added hundreds of new units and spurred dozens of new restaurants and bars in areas that used to empty parking lots and boarded up buildings.
NLG: Holy contextually appropriate development, Batman! We're pretty sure that if Forest City had proposed an infill project like that in Prospect Heights, it would be occupied by now. But they went for overkill, not infill.
Maryland Community Newspapers Online, Vying for bio
Forest City's Biopark business is doing better than its basketball portfolio, marginally.
"There is some competition between us," said Scott Levitan, senior vice president and development director for the Science + Technology Park at Johns Hopkins, developed by the Forest City-New East Baltimore Partnership. The first of five planned buildings in that biopark near medical giant Johns Hopkins opened about a year ago, and the 280,000-square-foot, $100 million facility is 50 percent occupied, with an additional 20 percent committed to leases, he said.
NLG: The Science + Technology Park at Johns Hopkins was the beneficiary of eminent domain takings.
Posted by eric at 11:58 AM
June 10, 2009
What's new with the mothership in Cleveland?
Norman Oder of Atlantic Yards Report listened in on yesterday's first quarter conference call with investment analysts.
Forest City executives to investment analysts: everything's fine with AY
Unlike past conference calls, Atlantic Yards does seem to be on the minds of some investment analysts, though Forest City executives still contend that the project is still on.
During the Q&A, about 30 minutes into the call, Analyst Sheila McGrath asked for an update on New York projects, including Atlantic Yards.
[Forest City Ratner President Joanne] Minieri responded: As it relates to Atlantic Yards, yes, there’s been a lot of press on Atlantic Yards, but we maintain, we’re committed to the project. We’re targeting a second part of the year master closing. We’re moving toward finalizing all the necessary negotiations with the public parties. We’re working very closely with Barclays and Goldman [Sachs] on the arena bond financing that is anticipated to occur so that we can go vertical on the arena. You probably have read today that we’ve announced the new architects on the arena. We are moving quickly to complete the design and cost estimates for that. That will enable us to meet our timetable for a second-half master closing.
Not only were the new architects announced, they were denounced. Minieri did not mention that there would be a new General Project Plan, and that there are pending appeals and potential new lawsuits.
What should $20 million buy? How much walking-around money do FCE family members have?
Though Forest City Ratner wants to short change the Metropolitan Transportation Authority, by only paying $20 million up front for the portion of the Vanderbilt Yard it needs to build the arena, instead of the $100 million as promised, family members of the parent company scrounged up $20 million to purchase more stock from the recent offering, intended to raise more capital to deal with the company's crushing debt burden.
Posted by lumi at 6:25 AM
June 8, 2009
Forest City Posts Smaller 1Q Loss; Occupancy Rates Down
Dow Jones Newswires via WSJ.com
Buffeted by the New Jersey Nets' $13-and-a-half million quarterly operating loss, Forest City Enterprises lost more money in the last quarter than Wall Street analysts expected them to — though not quite as much as they lost a year ago.
Forest City Enterprises Inc. (FCEB) reported a narrower fiscal first-quarter loss as the real-estate investment trust posted weaker-than-expected results amid largely weaker occupancy rates.
...For the quarter ended April 30, Forest City reported a loss of $30.7 million, or 30 cents a share, compared with a prior-year loss of $40.4 million, or 39 cents a share. The bottom line benefited from reduced project write-offs and increased rental-property income, but that was partially offset by $8.7 million in job-cut charges and $10.7 million in other write-downs.
Revenue rose 2.6% to $313 million.
The mean estimates of analysts surveyed by Thomson Reuters were for a 17-cent per share loss on revenue of $346 million.
Here's the official Forest City press release. CEO Chuck Ratner is not too bullish on the near-future for his line of business:
"As we have stated now for several quarters, we continue to be cautious in our outlook," Ratner said. "While we believe efforts to stimulate the economy will have a beneficial impact over time, we see no measureable improvement in current conditions, and we believe the recession will continue to deepen, particularly for real estate, before the economy turns around. As a result, we expect to see continued softness in fundamentals, particularly in retail and, to a lesser degree, in residential."
However, he's gung-ho about Forest City's "great" Atlantic Yards project:
"In mid-May, a significant legal victory was achieved for the Company's Atlantic Yards project in Brooklyn, when the Appellate Division, Second Department, unanimously upheld New York State's right to use eminent domain to acquire property at the site, given the significant public benefit associated with the project. This was an important win and affirmation for Atlantic Yards, and effectively removes one of the few remaining obstacles to moving forward with this great project."
More coverage...
Cleveland Plain Dealer, Forest City says losses narrowed, EBDT rose in first quarter
Executives at Forest City and Forest City Ratner Cos., the company's New York arm, also have said they plan to break ground this year for a new arena in Brooklyn for the New Jersey Nets. The arena is part of the company's much-delayed Atlantic Yards project. Last week, Forest City announced that architect Frank Gehry will not longer design the arena. Gehry, the master-planner for Atlantic Yards, has been replaced with architectural firm Ellerbe Becket, which has designed sports facilities including Quicken Loans Arena.
As of right now, Wall Street appears unimpressed by Forest City's results: shares are trading down 25 cents, or 3.52%.
Posted by eric at 12:05 PM
So, Daniel, how was YOUR weekend?
The Brooklyn Paper
By Gersh Kuntzman
When you're "Atlantic Yards most dogged critic," the price of admission to developer Forest City Enterprises's annual stockholder's meeting in Cleveland is just a few shares.
Daniel Goldstein of Develop Don’t Destroy Brooklyn, went to Cleveland on Friday to confront development company officials on why their project should be abandoned.
As one might expect, company officials were not persuaded.
Goldstein listed a litany of recent problems with the project, followed by a question:
“You don’t own the land you need or have the financing you need to construct the arena or the rest of the project. Yet you claim you will finance it, break ground this year and open the arena in 2011, which is already an impossibility. This means the losses from keeping the team in Meadowlands will continue to mount. “You also have a looming end-of-year IRS deadline to issue the tax-exempt arena bond, and missing the deadline would cost Forest City an estimated $150–190 million, likely spelling doom for the project.
“Given all of these challenges, can you let the Forest City Enterprises shareholders know [the] contingency plans if and when you don’t break ground in 2009 and can’t open the arena in Brooklyn in 2011?”
The answer came from Forest City Enterprises Co-chairman Al Ratner:
“The company does believe that it will start the project during this year,” he said, declining further comment because, he said, of ongoing litigation.
Posted by lumi at 6:28 AM
June 6, 2009
Daniel Goldstein of DDDB Attends Forest City Annual Meeting
Develop Don't Destroy spokesman Daniel Goldstein attended yesterday's Forest City Enterprises' annual meeting to ask questions about the status of the proposed Atlantic Yards project. It makes sense to travel to Cleveland since state officials here in New York keep much about the project a secret.
Atlantic Yards Report, DDDB’s Goldstein goes to annual meeting in Cleveland, publicly asks Forest City questions, gets shrugged off
Goldstein was the first and only questioner. He spoke respectfully but his words were not those of a happy investor but of a company critic. (Had he been speaking at last Friday’s oversight hearing, supporters orchestrated by Forest City Ratner would have quickly shouted him down.)
“My name is Daniel Goldstein. I am shareholder. Thank you for allowing me to speak,” he said, noting he’d have a comment and then some questions. [Goldstein bought a few shares earlier this year to be able to attend.]
Forest City, he noted, is losing some $30 million a year owning the New Jersey Nets. The AY project is being redesigned, faces new political approvals, and faces a “staunch and widespread opposition.” (Well, it also has a lot of political juice.)
He cited ongoing litigation, diminished political support, and an “extremely challenging economic environment for an $800 million arena and 6400 housing units.”
Yesterday, he noted, it became official that architect Frank Gehry was no longer designing the arena, thus raising questions about the $400 million naming-rights deal with Barclays and thus the arena revenue model.
Forest City doesn’t own the land it needs or have the financing it needs to start the arena, he pointed out. “Yet the company claims it will finance the project, break ground and open the arena in 2011,” Goldstein said, suggesting that losses will continue to mount.
...
Forest City has an end of year deadline for tax-exempt arena bonds that would save the developer at least $150 million, Goldstein said, then offering questions:
- Given all of these challenges, can you let Forest City shareholders know what contingencies you have if you can’t break ground in 2009 and can’t open the arena in 2011?
- And why has Forest City chosen this particular project, “fraught with so many major obstacles,” as the only development to begin vertical construction this year?
FCE Co-Chairman Albert Ratner, on the webcast, seemed nonplused. “The company does believe that it will start the project during this year,” he said. Then, he calmly evaded the rest of the questions by claiming that ongoing litigation precludes further discussion of the issue.
Of course ongoing litigation did not deter an announcement about Gehry yesterday.
Even if construction begins in this calendar year, Forest City can’t open the arena in 2011—Ellerbe Becket arenas take 27+ months to build—so that’s a question that should be asked again and again of those promoting the project.
The Plain Dealer, Atlantic Yards opponent, Daniel Goldstein, shows up at Forest City Enterprises' annual meeting
Executives at Forest City Enterprises Inc. got a bit of a surprise Friday when the most vocal opponent of the company's Atlantic Yards project in Brooklyn, N.Y. showed up at the annual shareholders' meeting.
But an exchange between Daniel Goldstein and Forest City Co-Chairman Albert Ratner was short and polite, doing little to detract from the meeting's generally upbeat tone. Goldstein, whose apartment sits in the path of the project, raised questions about Forest City's ability to pull off the $4 billion, 22-acre development.
Ratner responded simply: Forest City believes it will start the project this year, beginning with a new arena for the New Jersey Nets basketball team. Then, citing outstanding litigation, he ended the conversation.
Posted by steve at 6:31 AM
June 3, 2009
FCE Press Release: Forest City to Webcast 2009 Annual Meeting of Shareholders
PR Newswire
CLEVELAND, June 3 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc., (NYSE: FCEA) (NYSE: FCEB) today announced that the Company will webcast its 2009 annual meeting of shareholders beginning at 2:00 p.m. Eastern time on Friday, June 5, 2009. The annual meeting is being held at the Ritz-Carlton hotel in Cleveland.
The business portion of the meeting will be followed immediately by management presentations. The meeting and presentations will be broadcast live over the Internet through an audio-only webcast on the Company's website. To access the live broadcast, please visit the investor relations page of the website, www.forestcity.net. A webcast replay will also be available on the website, beginning approximately 24 hours after the live meeting concludes.
Posted by eric at 4:03 PM
June 1, 2009
Forest City in the News
GlobeSt.com, $42 Million Forest City Project Breaks Ground
WASHINGTON, DC-Ground was broken yesterday on a piece of one of the District’s largest development projects – a waterfront park overlooking the Anacostia River. The 5.4-acre development is being built for $42 million in a public private partnership with Forest City Washington. It is part of the District’s plan to transform 42 acres of the former Southeast Federal Center site into an urban waterfront destination.
AP (via Forbes.com), DC mayor breaks ground on waterfront park
Mayor Adrian Fenty has broken ground for a waterfront park to be located between Nationals Park and the historic Navy Yard on the Anacostia River.
The Park at the Yards is part of Washington's largest development project. Fenty broke ground for the $42 million park Thursday, along with officials from private developer Forest City Washington and the General Services Administration.
Washington Business Journal, Forest City breaks ground on D.C. park
The Yards is the only public-private partnership in the country being built on federal land, which was made available by Congress in 2000. Altogether, Forest City and its partner, MacFarlane Partners, plan 2,800 residential units, 1.8 million square feet of offices and as much as 400,000 square feet of retail.
Dallas Observer Blogs, Forest City's "Not Ready" For Mercantile Continental to Become Landmark. Or Apartments Either. Not Just Yet.
Forest City is dragging its heels in hopes that two of its historic properties in Dallas are not encumbered by protective landmark status.
Posted by lumi at 5:03 AM
May 29, 2009
Savings on Labor Allow Work on Residential Skyscraper to Resume
The New York Times
by Charles V. Bagli
The Beekman is back!
Two months ago, work stopped abruptly at the 37th floor of the 76-story Beekman Tower as the developer Bruce C. Ratner desperately sought to cut costs on the project, a glass and stainless steel apartment building in Lower Manhattan.
Just as abruptly, work resumed this week on the tower, which will be the architect Frank Gehry’s first skyscraper and the tallest residential building in the city.
The developer, who had threatened to cap the building at 40 stories, said he was able to retain Mr. Gehry’s distinctive wavy-wall design and the tower’s full height, while paring labor expenses and taking advantage of falling prices for construction materials and appliances for the tower’s 900 apartments.
Posted by eric at 7:50 PM
Forest City in the News
Dallas Observer, This Evening, Talk of Designating Two Downtown Buildings as Historic Landmarks
Forest City tried to double-dip in Dallas’s subsidy pool through a landmark designation, and now they may be sorry they did so.
Noticed something interesting on the Landmark Commission Designation Committee's agenda for today's 5:45 p.m. confab: the re-initiation of historic designation proceedings for two downtown buildings, the Mercantile Continental Building on Commerce Street and the Dallas National Bank Building on Main Street (otherwise known as The Joule). That's re-initiation -- as in, both buildings were, at one time, being vetted to see if they deserved designation and should be afforded the attendant protections and stipulations that come with such a title. But the initiation proceedings were terminated -- by the very folks who initially approached the Landmark Commission about starting 'em up in the first place.
Katherine Seale, executive director of Preservation Dallas and a member of the Designation Committee, says that three years ago, the owners of both properties approached the Landmark Committee about designation. Forest City Enterprises, of course, owns the Continental, which sits just across the street from their Merc re-do, while Tim Headington is the oil man who sunk a small fortune into the circa-1925 Gothic revival skyscraper known as the Dallas National and rebranded it The Joule.
The Designation Committee found both more than worthy of historic designation -- each met at least eight of the 10 criteria -- and recommended moving forward. But representatives for both owners yanked their request for designation, Seale says, because officials with the city's Office of Economic Development told the owners they wouldn't be eligible for historic property tax credits, since both were receiving tax increment financing district money for their respective redos. (Forest City, which has promised 140 residential units in the Continental Building, is set to receive $10 million from the Dallas Connection TIF; The Joule, $8.5 million from the City Center TIF.) Messages have been left with Karl Zavitkovsky, head of Economic Development.
"So the property owners asked the nominations to be withdrawn," Seale says.
The Designation Committee will vote on re-initiating designation proceedings without the owners' consent.
Bloomberg News, Martin Whitman Is Buying Distressed Debt, Forest City
Martin Whitman’s Third Avenue Management LLC increased its stake in Forest City Enterprises Inc., the property developer whose shares have tumbled 83 percent in the past year, and is investing in distressed debt while avoiding most stocks.
Third Avenue already owned 22.7 million Class A shares at the end of the first quarter, more than anyone else. The firm bought shares that were sold for $6.60 apiece in an offering this month. Forest City is the Cleveland-based developer that’s planning a new arena for the New Jersey Nets in Brooklyn.
Whitman confirmed the purchase in an interview in Chicago yesterday. He said Third Avenue plans to invest in more companies that are seeking to pay down debt and is avoiding stocks because of short sellers’ ability to drive down prices.
NoLandGrab: Whitman has been a respected fund manager for decades, but riding a $70 stock down to $6, and then buying more, may not be a recipe for success.
Posted by eric at 7:47 PM
May 28, 2009
Forest City in the News
KDVR.com, Denver's Stapleton neighborhood facing school shortage
Denver's Stapleton neighborhood was marketed to parents with young children as a community where you could get to work easily and have your children go to school down the block.
But as fate would have it, so many parents with young children moved there that the Denver School District and developer Forest City now face a shortage of classroom seats.
NoLandGrab: Keep in mind, that, back in Brooklyn, Forest City Ratner claimed that if Atlantic Yards was built to its proposed scale, that there would be enough capacity in area schools to handle the increase in population.
The Pittsburgh Post-Gazette, Water taxi does the weekend party loop
Forest City Enterprises finally gives the nod to docking privileges for a Pittsburgh water taxi.
Posted by lumi at 6:42 AM
May 27, 2009
PRESS RELEASE: Forest City Enterprises, Inc. Announces Underwriters' Exercise of Over-Allotment Option Related to Offering of Class A Common Shares
PR Newswire
CLEVELAND, May 26 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA) (NYSE: FCEB) today announced that the underwriters have exercised, in full, their over-allotment option to purchase an additional 6.8 million shares in relation to the company's previously announced public offering of 45.5 million Class A common shares, priced at $6.60 per share.
Forest City expects to receive net proceeds from this offering of approximately $329.8 million, giving effect to the exercise of the over-allotment option. Forest City intends to use the net proceeds from the sale to reduce its outstanding borrowings under the Company's $750 million revolving credit facility.
The joint book-running managers for this offering are Merrill Lynch & Co., Goldman, Sachs & Co. and Morgan Stanley.
Copies of the final prospectus supplement relating to these securities may be obtained by contacting Merrill Lynch & Co., Attention: Prospectus Department, 4 World Financial Center, New York, NY 10080, telephone: 212-449-1000; Goldman, Sachs & Co., Attention: Prospectus Department, 85 Broad Street, New York, NY 10004, telephone: 212-902-1171 or 866-471-2526, fax: 212-902-9316, e-mail: prospectus-ny@ny.email.gs.com; or, Morgan Stanley & Co. Incorporated, Attention: Prospectus Department, 180 Varick Street, New York, NY 10014, e-mail: prospectus@morganstanley.com.
TradingMarkets.com, Forest City Sells 6.8 Million Overallotment Shares
Posted by lumi at 4:24 AM
May 21, 2009
Forest City in the News
TradingMarkets.com, Forest City Enterprises raises $300.3 million through public offering
May 20, 2009 -- Forest City Enterprises, Inc., a US-based real estate company, has completed a public offering of 45.5 million Class A common shares at $6.6 per share for the gross proceeds of $300.3 million.
The Denver Post, Greene: Stapleton botches delivery
Forest City Enterprises and the Denver School District screwed up population projections and now schools are already overcrowded in the developer's new mixed-use Stapleton development community.
Posted by lumi at 5:05 AM
May 20, 2009
Cell hell!
The Brooklyn Paper, Police Blotter
by Mike McLaughlin
Another week, another felony at one of Bruce Ratner's malls. Those places sure were a lot safer back when the Atlantic Yards blight study was being done.
Later that day, cops cuffed an 18-year-old girl who nicked a mobile phone from a 12-year-old girl outside the Bruce Ratner-owned shopping mall at the corner of Atlantic Avenue and Fort Greene Place. The suspect’s accomplice, another young woman, escaped.
Posted by eric at 11:08 AM
Forest City’s Planned NJ Nets Arena Clears Another Legal Hurdle
CoStar Group
By Randyl Drummer
Forest City Ratner Companies is claiming a court victory in its attempt to move the NBA’s New Jersey Nets onto the hardwood floor at the company’s Atlantic Yards project in Brooklyn, NY.
In other news from the industry newsheet, CoStar Group is reporting that Saks Fifth Avenue has signed on as the anchor tenant for Forest City Ratner's Ridge Hill project in Yonkers.
Forest City Ratner Companies (FCRC) announced that Saks Fifth Avenue signed a Letter of Intent to anchor the company's mixed-use development, Westchester's Ridge Hill, which is currently under construction. Saks plans to open an 80,000-square-foot store at the development, which is located between the New York State Thruway and Sprain Brook Parkway in Westchester County, New York.
Posted by lumi at 6:29 AM
May 15, 2009
Forest City in the News
Morningstar.ca, Forest City Issues Shares and Updates 1Q
Forest City Enterprises FCE.A announced the issuance of 45.5 million Class A common shares priced at $6.60 each with an overallotment option of an additional 6.8 million shares, increasing total share count (including the overallotment) by roughly 51% and Class A share count by 65%. The offering price is accretive to our previous fair value, so we are raising our estimate to account for a slightly lower estimated cost of capital and a reduced probability for a corporate level default.
Forest City plans to use the nearly $345 million in proceeds to pay down the outstanding balance on its $750 million credit facility, which matures in March 2010. This represents a material reduction in the company's recourse debt, reducing the likelihood of a corporate level default. Still, Forest City has nearly $1.5 billion of maturing debt remaining in 2009 and 2010--a majority of which is nonrecourse and at the property level. In our opinion, these obligations are large enough to give cause for concern. We still think further equity issuance is possible over the next couple of years, as asset sales alone will likely prove insufficient in managing maturing debt and deleveraging the company.
Crain's Cleveland Business, Forest City Enterprises prices sale of 45.5 million shares
Forest City said it is in active negotiations toward sales of, or joint ventures involving, about $1.3 billion of assets, representing net after-tax proceeds of about $180 million. The company said it anticipates continuing to pursue more asset sales or joint ventures over the 2009-2012 period.
Forest City said no definitive agreements have been entered into to date, and no assurance can be given that these asset sales or joint ventures will occur.
Reuters, Forest City shares tumble after offering announced
In late morning trade, Forest City shares were down 17.2 percent at $6.22, and were among the top percentage losers on the New York Stock Exchange.
..."We believe the equity raise is part of a multi-step process to deleverage the balance sheet which may also include future dividend reductions and planned asset sales," Goldman Sachs analyst Jonathan Habermann wrote in a research note.
NY Times Deal Book, Debt-Laden Companies Rush to Sell Stock
Not surprisingly, the capital-hungry finance and insurance industries are leading the way in offering new stock, accounting for a little more than half of the sales year to date.
But nonfinance companies such as MGM Mirage, Cliffs Natural Resources, Energizer Holdings and Forest City Enterprises have also lined up in the parade to tap the capital markets.
Unlike the banks and finance companies, many of which need the additional cash to satisfy the capital requirements from the government’s stress tests, these other companies are generally looking to use the new capital to pay down their increasingly burdensome debt loads, much of which was racked up during the boom times, in some cases to finance deals.
The Wall St. Journal, Rambus Roars; Stock-Sale Plan Fells Forest City
Class A shares of Forest City Enterprises (NYSE) fell 1.21, or 16%, to 6.30 as the Cleveland real-estate developer set plans to sell 40 million shares.
The Cleveland Plain Dealer, Forest City prices stock offering, expects more than $300 million from sale
The real estate company, based in Cleveland, released additional details Thursday morning about its plans to issue and sell common shares to raise cash and pay off debt. Forest City said it will sell 45.5 million shares at $6.60 per share, with the option to sell another 6.8 million shares depending on demand.
...
The company expects its offering to close Tuesday.
...
Facing a crisis in commercial real estate and limited access to new loans, real estate companies including Forest City have been trying to reduce their debts and build up cash.
Posted by eric at 12:24 AM
May 14, 2009
Forest City Ratner mints money with new shares, stock declines only 16%
Atlantic Yards Report
Morningstar, which had once called Forest City Enterprises stock worthless but then raised its Fair Value to $4 three weeks ago, today upped its Fair Value estimate to $5.50, even as the developer announced it would sell 45.5 million new Class A shares at $6.60 each.
Gross proceeds will be about $300 million, or, if underwriters buy an additional 6.8 million shares, $345.3 million.
The stock closed at $6.30, down 16.11%, a hit to current shareholders but certainly a risk worth taking for the company, given its need to raise money to pay off debt.
Still, Morningstar issued an analyst's report that said "Forest City's risks outweigh its potential rewards." Analysts tracked by Yahoo are slightly more pessimistic than they were last month and months previous.
NoLandGrab: That decline of "only" 16% represented the largest one-day drop in FCE-A shares in months. And buyers aren't going to be lining up to buy new shares at $6.60 each if the market is being made at $6.30.
Posted by eric at 10:46 PM
Atlantic Yards developer to sell stock to raise capital for fiscal life-support
Seeing as how we've been growling at Atlantic Yards developer Forest City Ratner for over five years, we're gonna give you the plain-English bearish analysis of the latest press release from parent company Forest City Enterprises (FCE).
In what would appear to be an extreme measure, FCE is planning to issue more stock to raise cash in order to help restore its balance sheet.
Saddled by underperforming assets and a crushing debt burden, during the past year FCE has sold properties, renegotiated some of its loans, and taken steps to cut costs, including multiple rounds of layoffs.
Apparently, these measures haven't been enough, and now the company is hoping to raise much-needed cash from the equity marketplace, even though (and perhaps, because) banks have been reluctant to extend more credit.
LINKS:
PR Newswire (press release), Forest City Provides Update on Fiscal 2009 First Quarter
TradingMarkets.com (press release), Forest City Enterprises To Offer 40 Million Shares
The Wall Street Journal, Forest City To Sell 40M Shares, Seeks Credit-Line Extension
The Cleveland Plain Dealer, Forest City to issue, sell 40 million shares to pay off debt
Bloomberg.com, CommVault, Forest City, MBIA, Whole Foods: U.S. Equity Preview
Posted by lumi at 6:49 AM
Forest City Enterprises backs off arena construction pledge, issues 50% more stock to raise money (and dilute value?)
Atlantic Yards Report
Norman Oder's highlights Atlantic Yards developer Forest City Enterprises's quiet admission that there will apparently be no groundbreaking for Atlantic Yards this year, and that plans to issue 40 million shares of new stock would dilute current shares by 50%.
What a difference a month and a half makes:
Forest City Enterprises, 3/30/09 press release:
In 2009, we do not anticipate commencing construction on any new projects, with the exception of the arena at our Atlantic Yards project in Brooklyn, and a fee-based development project in Las Vegas.
Forest City Enterprises, 5/13/09 press release:
The Company anticipates investing approximately $169 million of equity to satisfy existing completion guaranty obligations on eight projects currently under construction as of January 31, 2009. In addition, although Forest City does not anticipate commencing any new vertical development in the near term, it does anticipate potential capital needs related to existing development opportunities and the preservation of entitlements on a number of long-term projects of approximately $331 million over the course of the next four years. (Emphases added)
...
Forest City also announced it would sell 40 million newly issued Class A common shares, with the underwriters allowed to sell an additional 6 million shares. The developer stated:Forest City intends to use the net proceeds from the sale to reduce its outstanding borrowings under the Company's $750 million revolving credit facility and, if proceeds remain, for general corporate purposes.
What Forest City didn't say--and neither the Wall Street Journal nor Cleveland Plain Dealer noticed--is that, as of April 14, there were 80,744,785 shares of Class A Common Stock and 22,686,427 shares of Class B Common Stock, according to the Proxy Statement linked here.
Oder reports that in after-hours trading, FCE-A shares dropped by 12%, "a suggestion that traders believe the value of the stock would be diluted by the end-of-day announcement."
NoLandGrab: Keep in mind that the purpose of the "revolving credit facility" is to support day-to-day operations. This is akin to FCE running up its credit cards to the tune of over $400 million.
Posted by lumi at 6:31 AM
May 13, 2009
Neighbors Use Food Stamps, but Not Costco
The NY Times
By Jim Dwyer
Atlantic Yards developer Forest City Ratner plays a role in another controversy in NYC, this time over the big-box store in its new East River Plaza development that is happy to accept subsidies and use local streets for late-night deliveries, but won't accept food stamps:
This October, when Costco, the big warehouse chain, opens its first Manhattan store, it will occupy a brand new mall along the East River Drive at 116th Street that has been developed with $55 million in tax-free bonds and grants. The company will be eligible for millions of dollars in tax credits for creating new jobs.
But there’s one kind of government money Costco won’t take: food stamps.
That policy effectively cuts off more than 30,000 of its immediate neighbors in East Harlem, who receive food stamps.
...
Costco is moving into the site of the old Washburn Wire factory, which shut down decades ago, and is being developed as East River Plaza by a partnership of Forest City Ratner Companies and the Blumenfeld Development Group.The project received a $15 million economic development grant, and the city’s Industrial Development Authority issued $40 million in tax-free bonds to pay for a parking garage. The bonds will be paid back by the developer, but the lost tax revenue amounts to $10 million, according to the city’s Independent Budget Office
Posted by lumi at 6:43 AM
May 9, 2009
Commission on Public Integrity Releases Annual Report
New York State
The New York State Commission on Public Integrity released its 2008 Annual Report (click on the link for the PDF). Included in the report is spending by State lobbyists. It should come as no surprise that Forest City Ratner spent oodles on lobbying for the proposed Atlantic Yards project .
Hinman Straub Advisors, LLC had the largest lobbying contract, valued at $427,532 with Excellus Health Plan, Inc. Wilson Elser, Moskowitz, Edelman & Dicker, LLP had the second largest lobbying contract, valued at $372,030 with the New York Bankers Association. Fried Frank Harris Shriver & Jacobson, LLP had the third largest contract, valued at $370,399 with Atlantic Yards Development Company LLC.
Posted by steve at 8:46 AM
May 8, 2009
Commission on Public Integrity releases annual report
Empire State News
While the economy was cratering in 2008, one industry in New York State was thriving: lobbying. Spending was up, to $173.9 million (and that's just the stuff that gets reported). Guess who was paying for a good chunk of it?
Hinman Straub Advisors, LLC had the largest lobbying contract, valued at $427,532 with Excellus Health Plan, Inc. Wilson Elser, Moskowitz, Edelman & Dicker, LLP had the second largest lobbying contract, valued at $372,030 with the New York Bankers Association. Fried Frank Harris Shriver & Jacobson, LLP had the third largest contract, valued at $370,399 with Atlantic Yards Development Company LLC.
NoLandGrab: The biggest shocker in the Annual Report from the New York State Commission on Public Integrity? The real estate industry was only #2 in lobbying spending, thanks to the health care sector. One look at your health insurance premiums, and you'll know what all that spending bought them.
Posted by eric at 9:08 PM
East River Plaza Progress
what about the plastic animals
Here's one local Forest City Ratner project that's actually progressing (photo from WATPA).
It has been more than a year since we've checked on the East River Plaza. The huge downscale mall, currently lists Target, Best Buy, Marshalls and Costco as future tenants. The mall is expected to open by year's end. One of the developers, Blumenfeld Development Group, lost a lot of money to Bernie Madoff's ponzi scheme. The other developer, Forest City Ratner, has been tossing money away on their Atlantic Yards monstrosity. That may be good for East Harlem as the East River Plaza looks plainer and not nearly as hideous as the early renderings.
Posted by eric at 12:14 PM
May 7, 2009
Forest City in the News
Cleveland Scene, ON THE OUTSIDE LOOKIN' IN
Forest City used to rule the Forest City, but now, not so much.
Could it be? Sam Miller and the Ratners of Forest City Enterprises are officially out of the inner circle?
A lot has changed since Cleveland’s Uncle Sam had a tidy regular audience with ex-Mayor Mike White and former Plain Dealer publisher Alex Machaskee — back when the public coffers were an open check. White is raising alpacas, Machaskee is retired and Old Sam doesn’t have anybody to talk to anymore.
We tried to calm his nerves. I called him at HQ. He answered his own phone, as usual, then said, “I don’t want to talk about this,” when asked about his waning influence. I should have asked him first how he felt about the official announcement on Monday by Mayor Frank Jackson and County Commissioner Tim Hagan that the city will get a $20 million for the current convention center on Mall B.
Looks like Tower City is going to have to build its own damn brand, with no more help from the taxpayers, and no help from a new medical mart and convention center next door. Nobody even seems to care that Forest City was the first local company approached by Merchandise Mart Properties back more than a decade back. The company has since come out and said, “Suck it, Forest City. We’re going to kick it with Dick Jacobs over on the Mall.”
CoStar Group, AEW Acquires Shops at Grand Avenue for $33.5M
Forest City Ratner Cos. sold the Shops at Grand Avenue in Maspeth, NY, to a subsidiary of AEW Capital Management LP, for $33.5 million, or $335 per square foot. The sale price resulted in a capitalization rate of 7.75 percent.
Posted by eric at 9:21 AM
May 5, 2009
Forest City in the News
Here's some of the news from across the nation about Forest City Enterprises, the parent company of Atlantic Yards overdeveloper Forest City Ratner.
InsideBayArea.com, My Word: Russo divulge show his secret ballpark site
One of the owners of the Oakland A's mentions Forest City's Oakland boondoggle as he fires the next salvo in the public debate over where to site the team's new ballpark, which will allegedly be "financed with private funds."
But long before [A's managing owner Lew ] Wolff owned the team, the city decided to allow Forest City Developers to develop the downtown site with condos — and even provided Forest City with a $67 million subsidy. So instead of a baseball stadium, retail space and housing — at no taxpayer cost — the city, in a monumental example of bad planning, gave away the site to condos.
NoLandGrab: Regular readers will recall that Forest City's Oakland project is faltering. New condos are not selling and the latest idea is to turn empty lots into parking lots.
Unfortunately, you can count on interim parking lots in the footprint of Bruce Ratner's Atlantic Yards project in Brooklyn, and the build-it-and-they-will-come mentality won't save the developer from the next condo bubble.
Cleveland Plain Dealer, Moving On
Forest City Enterprises Co-Chairman Sam Miller says he's stepping down from the board of Cleveland State University. Though there are rumblings that he's not happy with the direction of the board, Miller would say only that he told CSU President Michael Schwartz when he was hired that he'd leave when Schwartz left. And Schwartz is retiring, too.
"I spent 10 years on that board, and I feel after 10 years of hard work and a lot of, let's say, material support, I feel that the progress that was made was more than was made since they started it. And I'm going on to some other colleges," he said.
Cleveland Plain Dealer, CWRU gets $8.7 million for medical school
Case Western Reserve University just announced "8.7 million in new gifts to [the] School of Medicine." Including:
A $2 million gift from Forest City Enterprises Charitable Foundation Inc. that will create a new Center for Surgical Skills Training and an endowed professorship.
Posted by lumi at 5:24 AM
May 4, 2009
Forest City in the News
Institutional Investor, Harlem Mixed-Use Complex Goes Up For Sale
The parent company of Atlantic Yards' developer is still selling assests to raise much-needed cash. An excerpt from the subscription-only site:
Forest City Enterprises is shopping a leasehold interest in Harlem Center, a 274,000-square-foot retail and office condo complex in Manhattan. Cushman & Wakefield has the listing.
The property is located on the corner of 125th Street and Malcolm X Blvd.
NY Daily News, Silverstein Properties launches Manhattan's tallest rental
Leasing starts next week at [Larry Silverstein's] Silver Towers, two 60-story glass structures at 42nd St. and 11th Ave. that are the latest addition to the West Side skyline. Now that Forest City Ratner may cut Beekman Tower from 76 to 38 floors, Silver Towers will be the largest and tallest rental in the history of New York.
Kitsap Peninsula Business Journal, Forest City and Navy Region NW break ground for community center
A Forest City subsidiary is one of the largest builders of miliary housing in the nation:
Representatives of Forest City Military Communities (FCMC) and Navy Region Northwest joined forces with public officials to break ground on a new Community Center located in the Southeast Family Housing area of Naval Base Kitsap, Bangor. The project is a part of the ongoing privatization partnership the Navy has undertaken to update its on-base family housing and amenities.
Fresno Bee, Fresno turns to local developers for downtown revitalization
Fresno is going local after Forest City Enterprises flamed out:
Today, many parts of Vision 2010 are in place: A new federal courthouse, a major office building, the first new housing downtown in 25 years. But others have flopped -- especially plans by a national developer, Forest City Enterprises, to rebuild 17 city blocks at downtown's southernmost point.
As a result, the city's top leaders are changing course. No more long waltzes with big builders from faraway cities. Instead, a new focus inward, sprucing up one storefront at a time, relying on local investment and guided by new rules for windows, facades, signs, traffic, parking and landscaping.
Posted by lumi at 5:06 AM
May 2, 2009
Forest City In The News
Inside Bay Area, My Word: No need for 'interim' parking lot in Uptown Oakland
What do you get when you give Forest City subsidies, but then it decides it can't build? Parking lots!
The Uptown renaissance is occurring despite a huge blemish in the heart of the district — a one-acre mud pit surrounded by an eight-foot chain link fence on the prominent corner of Telegraph and 19th. The future use of this site — flanked by the dazzling Fox Theatre and the handsome Uptown apartments, and located across the street from the art-deco landmark building housing Flora — is pivotal to the continued transformation of Uptown into a vibrant walkable district.
A residential tower has been approved for this lot; but the developer, Forest City, does not anticipate commencing construction for at least three years due to current market conditions.
Some City Council members are advocating for a 120-space interim surface parking lot on the site...
...
The parking lot proposal ignores the larger picture. While maximizing parking for the Fox might sell a few more tickets, a surface parking lot consuming an entire city block on Telegraph will jeopardize the revival of the entire district. A one-acre mass of asphalt and sea of cars will deter pedestrians contemplating a stroll up Telegraph to explore the new restaurants, bars and shops.
Shoppers prefer an uninterrupted flow of attractive storefronts and inviting open spaces.
For these reasons, these same City Council members gave Forest City a $60 million subsidy four years ago to eliminate the old surface parking lot at this very site. The previous parking lot was discouraging economic development and investment in Uptown.
Why should we care so much about a temporary parking lot? Because "interim" parking lots often remain for years or decades, depending upon market conditions and developers' whims. The new Cathedral Christ of Light, for example, was built on the site of an "interim" parking lot that remained for more than 40 years.
Cleveland Plain Dealer, Possible expansion of TALF for commercial loans?
by Michelle Jarboe
In Forest City's home base, they know that the developer will look for every opportunity to get its hands on taxpayer loot.
The Wall Street Journal reported this morning that the Federal Reserve is getting ready to announce new terms of a program that might soothe the troubled commercial real estate market.
The Journal cites unidentified sources in reporting that the Fed could expand the Term Asset-Backed Securities Loan Facility, which is designed to give investors low-cost loans to buy securities backed by consumer debt including car loans and credit-card loans. So far, the program has involved three-year loans. But, according to the Journal, the Fed could announce new, five-year loans better-tailored to investors in commercial-mortgage backed securities -- a market that disappeared during last year's financial meltdown.
...
You can be sure that local real estate companies -- including shopping center owner Developers Diversified Realty Corp. and Forest City Enterprises Inc. -- are watching closely as the TALF program evolves.
Washington Business Journal, Contractors have filed nearly $28M in liens in D.C., Northern Virginia
By Melissa Castro
Problems with a different FCR "Yard" project seem to indicate financial problems for the developer.
Dozens of high-profile projects are facing liens from hard-pressed contractors. In just one week of March, Forest City Washington was slapped with a $191,460 lien for work done at its Yards project near the baseball stadium, while Faison Enterprises Inc. and Canyon-Johnson Urban Funds LLC got hit with a $118,674 lien at the nearby Onyx Apartments. The CityVista mixed-use project faces a nearly $400,000 lien for work related to Results, The Gym’s outpost there, and Intrepid Real Estate’s uber-luxury condominium building at 2501 Pennsylvania Ave. NW is on the hook for $154,555.
Posted by steve at 6:08 AM
May 1, 2009
Brownstoner double whammy
Prepping for Something Big at City Tech
Brownstoner has got the news that soil testing is underway for "City Tech Tower," a joint venture between the school and Forest City Ratner. According to the Brooklyn Daily Eagle, the current plan is for an un-tower-like 350,000-square-foot academic building of eight or nine stories.
Development Watch: Atlantic Terrace Tops Out
While no one can reliably tell you when Forest City Ratner affordable housing will get built at Atlantic Yards, Brownstoner is reporting that the Fifth Avenue Committee just topped out the Atlantic Terrace project, directly across the street from the project everyone loves to loathe.
This place is great news in terms of affordable housing: Roughly 70 percent of the units are earmarked for low- and moderate-earners.
NoLandGrab: Case in point, if Bruce Ratner was truly focused on building affordable housing, his megadevelopment scheme would be well on its way by now.
Posted by lumi at 4:56 AM
Forest City in the News
Business Facilities Magazine, A New York State of Mind
Forest City Ratner is one of the major players in Yonkers's development renaissance.
The Cleveland Plain Dealer, Cleveland's downtown waterfront gets a makeover on paper that envisions public spaces, fishing piers
Cleveland leaders, hoping to transform the city's industrial waterfront, look to other cities for examples.
Pittsburgh acquired hundreds of acres of riverfront land, crafted plans and partnered with developers, like Albert Ratner of Forest City Enterprises and John Ferchill, both of whom have Cleveland roots, Murphy noted.
NoLandGrab: Um... Pittsburgh shelved the Forest City convention center hotel project in response to the development company's revised proposal to downsize the project, despite the lure of $34 million in subsidies. [See, Pittsburgh Post-Gazette, Convention center hotel plans on hold]
Posted by lumi at 4:39 AM
April 30, 2009
Developers Say Labor Pact Saves Less Than Claimed
The NY Times
By Charles V. Bagli
Construction union concessions sought by NYC developers could yield as much as a 20% savings on labor costs, though that may only translate into a 5-12% overall reduction in project costs.
The agreement, which claims to cut project costs by “an average of 16 to 21 percent,” is all but finished and a news conference still expected. More than a dozen projects have lined up to participate. But, developers and bankers say, that does not necessarily mean that any of them will proceed. The matter has become an object lesson in the intricate dance steps of New York politicians, real estate executives and union officials.
Though representatives for Atlantic Yards developer Bruce Ratner have recently denied that the company's Beekman St. project is being topped out at half the planned height, reporter Charles Bagli cites the Frank Gehry-designed tower as an example of a project stalled mid-development in hopes of securing labor concessions:
The developer Bruce Ratner recently stopped work at the 38th floor of his planned 76-story Beekman Tower downtown, threatening to cap the building at 40 stories if he did not get concessions. Real estate executives say, however, that part of why Mr. Ratner — and others — are struggling is because annual rents are about one-third less today than the $80 per square foot that had been projected.
NoLandGrab: Possibly, in the case of Ratner's Beekman St. project, slow progress on the labor agreement is a scapegoat. Aside from the downward market projections mentioned above, parent company Forest City Enterprises has been struggling to keep up with debt maturities, has stopped or slowed work on many large-scale projects and put premium retail properties up for sale.
Posted by lumi at 5:40 AM
April 29, 2009
Forest City Completes Sale of New York Retail Center
Atlantic Yards developer Forest City Enterprises just sold a Queens shopping center to raise some much-needed cash, which should cover losses for the NJ Nets for a few months.
From the press release:
CLEVELAND, Ohio, April 28 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA) (NYSE: FCEB) today announced the sale by its subsidiary of The Shops at Grand Avenue, a retail center located in the Borough of Queens. The property was purchased by an affiliate of AEW Capital Management, LP, for a selling price of $33.5 million, representing a cap rate of approximately 7.75 percent on in-place income. The transaction, which closed April 16, 2009, generated proceeds of approximately $9.4 million, net of partner tax indemnification.
"We have always been an active seller of real estate from our portfolio," said Charles A. Ratner, Forest City president and chief executive officer. "Today, selective sales, joint ventures and other structures are part of our strategy to generate liquidity in response to current economic and financial-market conditions. As this transaction demonstrates, our high-quality properties in strong markets continue to attract buyer interest, even in a down market."
The Shops at Grand Avenue, which opened in 1997, is a 100,000-square-foot community center anchored by Stop & Shop, and featuring tenants including Party City, Mandee and Ridgewood Savings Bank.
Also, Crib Notes, Forest City sells New York shopping center
Posted by lumi at 5:02 AM
April 27, 2009
Forest City in the News
Baltimore Business Journal, To jump-start East Baltimore biopark, Forest City may scale back
Sometimes you build it and they don't come:
While officials of the Science + Technology Park at Johns Hopkins say they are not altering the master plan for the $1.8 billion project, they are considering cutting in half the size of a planned 280,000-square-foot lab building that is supposed to be constructed next. Or the project’s developer, Cleveland’s Forest City Enterprises Inc., could bump ahead in the development pipeline a 150,000-square-foot research facility planned for the project’s third phase.
Regardless of how Forest City proceeds, it has to do something to attract tenants and help finance the project, said Scott Levitan, a senior vice president with Forest City who handles leasing for the project, a key component of Gov. Martin O’Malley’s plan to boost Maryland biotech industry. More than eight years after then-Baltimore Mayor O’Malley unveiled plans for the sprawling redevelopment north of Johns Hopkins Hospital, the project is behind schedule, over initial budget projections and the first building is half-leased.
Denver Post, Stapleton-Northfield roadway primed to go
A road tying Forest City Enterprises's award-winning Stapleton project with other area projects is slated to receive federal stimulus money.
GlobeSt.com, Ballot Petition Back to State Supreme Court
Foreset City Enterprises's deal with the City of Las Vegas is embroiled in courtroom drama.
Posted by lumi at 5:04 AM
April 23, 2009
More empty stores at area malls
Richmond BizSense
By Al Harris
Forest City Enterprises's newly minted White Oak Mall serves as a case in point to illustrate the sagging market for retail space in malls nationwide:
Just a few miles down the road from Fairfield Commons, the new outdoor strip center White Oak Village (owned by Chicago-based Forest City, which also owns Short Pump) had 16 empty stores for a vacancy rate of 27.5 percent. That figure includes the standalone restaurants, big-box stores (two of which are unoccupied) and the strip center “village.” The shopping center opened in October and the stores are still awaiting their debut tenants. With excess retail space opening up around the city, that wait could be longer than expected.
NoLandGrab: Those in the know, know that Forest City is headquartered in the "Forest City" of Cleveland — not Chicago.
Posted by lumi at 6:01 AM
April 22, 2009
Forest City in the News
Daily Herald, Des Plaines considers redevelopment options
The Des Plaines city council Monday approved a memorandum of understanding with Cleveland-based Forest City Enterprises, formalizing the city's intent to make it the master developer for the 70-acre Five Corners taxing district.
Forest City likely would redevelop roughly 20 acres of the Five Corners redevelopment area, centered around Rand and River roads. But the developer also may be involved in planning the future redevelopment of the entire district, officials said.
Nets Daily, What’s Going on Here?
NJ Nets and Atlantic Yards superfan "NetIncome" noticed that shares in Forest City Enterprises have reached the high single-digit range, though he doesn't know why. [Neither do we for that matter.]
Forest City Enterprises is Bruce Ratner’s parent company and the biggest shareholder in the Nets.
Its stock has more than doubled in a little more than two weeks, better than 4% alone on Friday. It has gone from $3.41 on March 30 to $8.57 on Friday…that’s a 151% increase in 14 trading days. It got as high as $8.97 Friday before dropping back a bit late. We believe that’s the highest it’s been, intraday, since December. The whole market is going up, but not 151% in 14 trading days.
FCE owns 23% of the Nets and a big chunk of Atlantic Yards. We doubt this is happening because investors think the Nets are going to get the overall #1 pick in the lottery. Similarly, we cannot imagine it happening if those investors, several of whom are big institutional investors, think Atlantic Yards is dead, considering it’s the only major project FCE is moving during the recession.
You know the old adage: buy on the rumor, sell on the news. What’s the rumor?
TheStreet.com, Profit With RealMoney
On March 10, RealMoney contributor Tim Melvin recommended Forest City Enterprises (FCE.A Quote) to subscribers in an article entitled, "The Coming Value Party." Forest City shares closed March 10 at $4.67. The stock closed Friday at $8.57, giving subscribers who followed Melvin's advice an 83.5% return.
NoLandGrab: Shares of FCE-A closed on Tuesday at 7.80.
Posted by lumi at 4:41 AM
April 20, 2009
Is commercial real estate a time bomb?
Mall operator General Growth Properties' bankruptcy is worrisome. But even if commercial real estate weakens further, the market probably won't collapse.
CNN Money
By Paul R. La Monica
Can watchdogs draw any conclusions about the financial health of Atlantic Yards developer Forest City Enterprises from last week's news of the collapse of General Growth Properties? Well, yes and no...
General Growth Properties, the nation's second largest operator of shopping malls, filed for Chapter 11 protection Thursday morning. That makes General Growth (GGP) the biggest retail casualty yet of this recession, a downturn that also led to the bankruptcies of Circuit City, Linens 'N Things and Steve & Barry's.
...
"Losses in commercial real estate will rise across the financial sector throughout the year," said Keith Hembre, chief economist with First American Funds in Minneapolis. Hembre said that banks have an estimated $1 trillion worth of exposure to commercial real estate. ...
"Historically, commercial real estate is one of the last areas to experience a downturn," Hembre said. "Employment is the driver that determines occupancy."However, some investors believe that the commercial real estate market won't wind up completely melting down. For one thing, commercial real estate prices didn't get as out of whack with reality as residential real estate did.
...
In addition, it's worth pointing out that General Growth's bankruptcy does not come out of the blue. The company has been reeling for months and was widely viewed as one of the weaker real estate investment trusts, or REITs.
...
"Companies are not going bankrupt en masse," said Michael Cuggino, president of Pacific Heights Asset Management, a San Francisco-based investment firm that owned Kimco and ProLogis as of year-end. "Some REITs are raising capital when they have the chance and are being proactive about their debt instead of waiting until the last minute."Hembre agreed that there is a shakeout now taking place in the real estate sector and winners and losers are emerging. So even though the General Growth bankruptcy is certainly a bad sign, it may not be the beginning of a massive wave of real estate bankruptcies.
NoLandGrab: Clearly, Forest City has been struggling with cash flow for the past year. Time will tell if the company has been proactive enough to get ahead of its own credit crunch, or if it remains in crisis mode and will emerge as one of the losers.
Posted by lumi at 5:29 AM
Forest City in the News
Cleveland Plain Dealer, Red Cross, Cleveland cite Sam Miller for founding Save-A-Life - Honored
Sam Miller of Forest City Enterprises was honored by the American Red Cross and the city of Cleveland for founding Operation Save-A-Life, which gives free smoke alarms, batteries and installations to city and suburban residents at risk.
Pegasus News, Jean Michel’s, new restaurant going into Mercantile Place on Main, gets hero’s welcome from Dallas bigs
As Forest City Enterprises's Mercantile Place project in Dallas gets ready to open, a top Dallas restauranteur reveals plans to locate his latest upscale eatery in the downtown residential complex.
The Cleveland Plain Dealer, Cleveland Cavaliers owner Dan Gilbert calls medical mart site a mistake, points to Detroit's downtown
Armed with a photo-rendering of Forest City Enterprises's Medical Mart at Tower City proposal, the owner of the Cleveland Cavaliers continues to rail against last week's approval to place the project "at the site of Cleveland's existing convention complex on the downtown mall."
Posted by lumi at 4:55 AM
April 17, 2009
Jean Michel's to open at Mercantile Place
EATSblog
Speaking of what's good for the goose not being good for the gander, this blog entry reprints a Forest City Enterprises press release touting the developer's Mercantile Place project in Dallas, which relied heavily on the adaptive reuse of historic buildings, extolling "the beauty and character of a historic neighborhood" and its "sense of place." In Brooklyn, however, the developer has already demolished the historic Ward Bakery, and is itching to level the preservation-worthy Spalding and Atlantic Arts buildings, which have already been renovated and repurposed for housing.
Mercantile Place is comprised of three upscale apartment buildings - The Merc, The Element and The Wilson. The Merc is a 31-story luxury residential tower, formerly the renowned Mercantile National Bank Building. The building has been renewed, remixed and restored with first-class amenities and elegant finishes. It opened to residents in March 2008....
The Wilson was built in 1903 and patterned after Paris' Grand Opera House with Second Empire-style architecture. In 1999, the building was renovated and transformed from a former department store and office building into 143 luxury loft apartment homes.
Posted by eric at 2:31 PM
Forest City Enterprises stock rebounds
Atlantic Yards Report
Forest City Enterprises stock, which in late March had sunk below $4 a share, has more than doubled, closing yesterday at $8.23. That's still well more than 80% below the peak in recent years, but it's a major short-term gain, especially since Morningstar has said the stock is worthless.
The comeback did not begin dramatically after the developer released earnings results March 30, but rather picked up steam a little later.
While part of the recovery may be tied to the general rise in the market, it also may reflect new confidence in the company. The Motley Fool reports:
[S]ome of the smartest minds in the business are trolling through the wreckage of this market turmoil and picking up some of the pieces. All-star mutual fund manager Marty Whitman recently added to his position in real estate operating company Forest City Enterprises (NYSE: FCE-A)...
NoLandGrab: There's no disputing that someone with the foresight to have purchased FCE shares two weeks ago would have made some money, but we should point out that Marty Whitman's Third Avenue Value Fund has been by far the biggest holder of the company's shares for many years.
Posted by eric at 9:59 AM
April 16, 2009
Forest City in the News
The Cleveland Plain Dealer, Maple Heights: Southgate U.S.A. operations given to court-appointed receiver
A shopping mall owned by some of the principals of Forest City Enterprises is going into foreclosure:
Operations of Southgate U.S.A. shopping center on April 9 were given to a court-appointed receiver employed by an Ann Arbor-based real-estate investment company.
...
Southgate U.S.A. was operated by the Terminal Tower-based SG USA through an ownership group comprising members of the Ratner, Miller, Shafran and Siegler families for which Albert B. Ratner was managing member.Ratner is co-chairman of Forest City Enterprises Inc., Cleveland, which had no ownership stake in Southgate.
The Cleveland Plain Dealer, Dan Gilbert, Paul Dolan push for delay of medical mart agreement vote
Two Cleveland pro-sports team owners are calling for a delay in the approval vote for the Medical Mart project. One denies being an agent for Forest City Enterprises!
Brooklyn Daily Eagle, Court St. Boutique Owner Works Amid Sea of Change
Forest City Ratner's 12-story cinema complex is the centerpiece of change on Court St.
Chicago Sun Times, RENT TO OWN
New West Realty, co-developers of the 300-unit Eastgate Village complex at 26th and King Drive, has started one of the more aggressive rent-to-own programs in the Chicago area. It allows for 75 percent of a prospective buyer's monthly rent to be escrowed as a down payment for a purchase within a year. Buyers sign both an agreement to purchase a condo or town house and a one-year lease at Eastgate Village, part of the former campus of Mercy Hospital.
New West is a partner in the project with Fogelson Cos. and Forest City Enterprises Inc.
Posted by lumi at 5:31 AM
April 15, 2009
Forest City in the News
Denver Real Estate Examiner, Neighborhood Profile: Stapleton
If you're moving to Denver and considering the Stapleton area (emphasis added):
Built on the abandoned grounds of Stapleton Airport, Stapleton was conceived as a new-style urban community.
Restaurants, retail shops, sports and recreational facilities, schools and office space make this development almost self-contained. 30% of Stapleton is open space and parks!
The 80-acre Central Park has increased Denver’s park system by 25%. Pocket parks throughout the development nurture the sense of community, welcoming walkers, dog-walkers, and baby carriages. Many homes were built with large front porches, encouraging neighbors to get to know each other.
With a mix of single family homes, lofts, condominiums and townhomes, many different lifestyles are accommodated.
Sustainability is a fundamental principle of the developers, Forest City Enterprises, Inc. Since 2006, all new homes have been Energy Star certified.
There’s so much to explore and experience at Stapleton:
NoLandGrab: "Sustainability is a fundamental principle of developers, Forest City Enterprises?" Tell that to the Ward Barkery Building. [Before and after.]
Yahoo Finance, Forest City Enterprises Inc. (FCE-A)
FCE-A closed yesterday at 7.37, over double the share price from two weeks ago.
The Cleveland Leader, Med Mart - "We need it." Remind Me Why. Please.
The Medical Mart saga in Cleveland continues. This time, Forest City Enterprises only makes a cameo appearance as a point of reference:
Tower City got upscale outlets here when it opened because of Forest City’s ability to ask favors of people they do business with elsewhere. It had no long term meaning.
NoLandGrab: Non-Clevelandites (Clevelanders?) like ourselves have wondered how Forest City Enterprises managed to pull off an upscale mall at Tower City in the first place. Tower City has since receded to a more hum-drum food-court-type mall.
Posted by lumi at 5:06 AM
April 13, 2009
Forest City in the News
Forest City Enterprises is moving forward on a project run by its military community subsidiary and is trying to strike a developement deal in Illinios:
Kitsap Sun, Work Begins on Community Center at Naval Base Kitsap-Bangor
Forest City Military Communities, Navy Region Northwest and public officials broke ground Friday on a new community center at Naval Base Kitsap-Bangor.
The facility, which will be completed late this year, is in the southwest family housing area.
Journal Online, Major Changes At 5 Corners?
A city council committee agreed yesterday (Thursday) to forward to the full council a proposed preliminary agreement to work with a large company to redevelop part of the "5 Corners" area near Rand and River roads.
Aldermen are expected to fully air the proposed Memorandum of Understanding with redevelopment giant Forest City Enterprises, Inc. that could lead to major changes in the River-Rand area. If the full council accepts the Memorandum of Understanding, it could lead to a formal Redevelopment Agreement that would call for construction possibly sometime in 2010.
Posted by lumi at 5:31 AM
April 10, 2009
The Brooklyn Paper mailbag
The Brooklyn Paper, Letters
Your story about the arborcide caused by the New York City Waterfalls exhibit (“Silent spring — It’s official: W’falls were arborcidal maniacs,” April 4) should have made a least some reference to Mayor Bloomberg, who diverted $2 million in 9-11 disaster recovery money for its funding.
He led and directed almost all the $15-1/2 million in funding for it and then gave his pet project a (self-congratulatory) city award notwithstanding the damage it did.
It was probably because of Bloomberg’s involvement that there wasn’t an environmental impact statement or assessment ahead of time sufficient to identify the damage that was likely.
In addition to the diverted disaster recover money, funding came from Bloomberg’s private “charity” and from a City Hall “charity” that Bloomberg controls by being mayor and then from a long list of mostly real-estate industry interests, like Atlantic Yards developer Forest City Ratner, all of whom benefit terrifically from discretionary decisions made by the Bloomberg administration.
The kicker is that the recipient of all this money, Susan Freedman, president of the Public Art Fund, testified in support of the Bloomberg-proposed special extension of term limits.
Michael D. D. White,
Brooklyn Heights
Posted by eric at 10:06 AM
Forest City in the News
Arizona Daily Star, Gladden Farms gets debt extension
Gladden Farms, the financially troubled master-planned community in Marana, has received an extension to continue negotiations with lender GMAC Financial Services.
Located just west of Interstate 10 along Tangerine Farms Road, Gladden Farms is facing foreclosure on about 625 acres of undeveloped land. The developer had faced a foreclosure deadline Thursday.
Dean Wingert, senior vice president of Gladden Farms developer Forest City Enterprises, said negotiations with GMAC are continuing.
NoLandGrab: Doesn't sound like lawsuits are holding up this project.
Crain's Cleveland Business, Cleveland Play House property raised as option for convention center site
The saga over the site of Cleveland's proposed Medical Mart continues...
Add the site of the Cleveland Play House at 8500 Euclid Ave. to the mix as an alternative for the planned convention center and medical merchandise mart if Cuyahoga County and the city of Cleveland cannot strike a deal soon.
...The city of Cleveland owns the existing convention center and Cleveland Public Auditorium, which is MMPI’s favored site for the complex. Forest City Enterprises Inc. of Cleveland vigorously has challenged the viability and desirability of the Mall site for the complex compared with a site it owns on Huron Road near Tower City Center.
Pittsburgh Post-Gazette, Convention center hotel plans on hold
The SEA had been considering a new request for proposals after negotiations stalled with Forest City Enterprises, the Cleveland developer selected six years ago to build the so-called headquarters hotel with as many as 500 rooms.
But even with the lure of $34 million in public subsidies for the project, the SEA has been unable to complete a deal with Forest City to undertake the project, which those in the local tourism industry see as a key to increasing the number of conventions in Pittsburgh.
...While the convention center project has languished, about half a dozen hotels Downtown, on the North Shore and the South Side are in various stages of construction.
NoLandGrab: A measly $34 million in public subsidies? How dare the city of Pittsburgh insult Forest City like that!
Crain's Cleveland Business, Pittsburgh's convention conundrum
Crain's Cleveland Business picks up the Pittsburgh story.
Here’s another reminder that new convention centers aren’t always the economic slam dunks their backers expect.
...“But even with the lure of $34 million in public subsidies for the project, the (authority) has been unable to complete a deal with Forest City to undertake the project, which those in the local tourism industry see as a key to increasing the number of conventions in Pittsburgh.”
(Feel free to insert the word “Cleveland” every time you see “Pittsburgh” in this story. And six years of negotiations can’t produce a hotel deal? This isn’t just a problem caused by the economic downturn.)
Daily Herald, Des Plaines eyes deal for partial Five Corners redevelopment
Forest City can root out tax-increment financing deals or public subsidies like a pig can smell a truffle.
Des Plaines city officials are considering signing a letter of intent with Cleveland-based Forest City Enterprises to redevelop roughly 20 acres of the Five Corners taxing district.
...City officials have been in talks with Forest City for more than a year over the northern 20 acres of the TIF district.
..."We want to enter into a redevelopment agreement that makes them the preferred developer in that area," said Des Plaines 3rd Ward Alderman Laura Murphy, chair of the community development committee. "There is no development happening anywhere so for us to spark some interest in that, it's very exciting."
Posted by eric at 9:23 AM
April 8, 2009
Forest City in the News
East Bay Express, The Uptown Apartments Look Nice, But Are Still Mostly Empty
Build it and they will come... or not. Forest City Enterprises's Oakland "Uptown" mixed-use transit-accessible LEED certified project isn't living up to expectations, but don't worry, "Councilwoman Nadel said the developer, Forest City Enterprises, assured her that spring is always 'a really good time' for new leases...."
As usual, the Ratners have nothing to say for themselves: "Forest City declined to be interviewed for this story, instead offering a statement prepared by a San Francisco-based PR firm."
Journal and Topics Newsletter, City To Meet With Potential '5 Corners' Developer
Des Plaines city officials are scheduled to discuss later this week a proposed major redevelopment project near Golf and River roads that could result in new stores and new residential units.
Members of the city's Community Development Committee are scheduled to meet on Thursday, Apr. 9 in city hall at 8:30 a.m. to discuss a proposed memorandum of understanding between Des Plaines and Forest City, a large commercial and residential developer.
Before the meeting, Des Plaines city officials might want to read up on Uptown Oakland.
Posted by lumi at 5:16 AM
April 7, 2009
It came from the Blogosphere...
Real Talk with Commercial Property News, REal Talk with Adam Perrotta - Monday
Atlantic Yards is now legendary for large-scale projects that have stalled out:
...we've seen a spate of very large scale projects--from Brooklyn's Atlantic Yards to CityCenter in Las Vegas to Dallas's Victory Park--hit development hurdles and undergo scale-downs as financing options remain scarce and economic fundamentals contiune to weaken.
arch3611sp09, Progress of design
Frank Gehry's Atlantic Yards house of cards is the inspiration for one architecture student's design project.
ClevelandMagazine.com, Critical Sinking
When Cleveland's preeminent music critic gets canned for negative reviews of the city's new maestro, it sends a chilling effect through local newsrooms. It goes without saying that it's hands off the city's most connected real estate developer:
“I’d be leery if I started writing stories critical to Forest City,” says one reporter now. “Maybe that’s not a fair comparison, but it’s still something you have to think about.”
Brownstoner, City Used Eminent Domain for BAM Cultural District
More eminent domain in the redevelopment of Brooklyn. This time it's the City that made the land grab:
In January, the city acquired six properties in the BAM Cultural District via eminent domain. All six properties were within the block bounded by Fulton Street, Ashland Place, Lafayette Avenue and Rockwell Place. We should have noticed this earlier, as the BAM properties were actually acquired as part of a larger eminent domain grab that included several lots within the footprint of Willoughby Square Park.
Posted by lumi at 6:09 AM
April 5, 2009
Candidate draws praise but not endorsements
Las Vegas Sun
by Sam Skolnik
Grey hair and ulcers aren't the only thing Bruce Ratner has given his cousins in Cleveland — apparently he's sent them his Atlantic Yards playbook on cynical tactics of racial division, too.
As the city prepares for a public relations fight over the new city hall project, one of its allies, Cleveland-based Forest City Enterprises, is planning to reach out to the region’s minority groups in an effort to sell it.
Forest City has retained the Periwinkle Group, a local marketing and communications company that specializes in campaigns that reach black and Hispanic audiences.
Periwinkle is headed by Jo Cato, who also serves on the North Las Vegas Planning Commission. According to Cato, Forest City signed up Periwinkle late last year.
Cato said she set up a community meeting in February to talk about Forest City and its role as the lead developer of the project, which is slated to cost between $150 million and $267 million.
Forest City has also retained the local agency b&p, formerly known as Brown & Partners. Cato said she will have a better idea how her group may proceed in the coming weeks.
NoLandGrab: Note to opponents of Las Vegas's proposed new city hall — watch this film ASAP! And expect the announcement any day now of an "historic" Las Vegas City Hall Community Benefits Agreement.
Posted by eric at 10:46 PM
Bills on layaway for Wiregrass subcontractors
Firms: ‘Pay us’ for months-old work on the shopping center
Tampa Bay Business Journal
by Janet Leiser
The check's in the mail.
The developer of the $150 million Shops at Wiregrass took a bold move last October opening the picturesque shopping venue in a retail-unfriendly economy. While it has won raves for its vendor mix and design and has leases or commitments for 90 percent of the leaseable space in the open-air center, not everyone is seeing the payoff — yet.
At least 18 subcontractors have placed construction liens on the project. Eleven liens have been filed with the Pasco County Clerk of Court since Jan. 5. Many of the businesses, from the Tampa subcontractor that installed roll-up doors at Macy’s to the Plant City business that installed sidewalks and curbs, worked at a rushed pace to build Tampa Bay area’s newest regional mall.
...Forest City Enterprises Inc. said construction liens, totaling roughly $1.4 million, will be settled and aren’t indicative of financial problems with the project. Its general contractor, Winter Construction Co., of Atlanta said liens are routine in larger construction projects such as the 642,000-square-foot Wiregrass.
NoLandGrab: If liens "aren't indicative of financial problems with the project," they could be indicative of financial problems with the development company itself, which, according to CEO Charles Ratner, is working to "proacitvely manage" its "debt maturities." TRANSLATION: Forest City Enterprises is paying off creditors before paying off contractors, which, to most people, might be an indication of a cash-flow problem.
Posted by eric at 10:41 PM
Former educator Norbert Dennerll joins the campaign trail for Cleveland's mayoral race
Inside Cleveland City Hall [Plain Dealer blog]
by Henry J. Gomez
A three-term Cleveland councilman plans to take on Mayor Frank Jackson this year. Stop scratching your head. It's not Joe Cimperman or Martin Sweeney.
This challenger is Norbert Dennerll, who served three two-year terms ending in 1964. After 45 years, he is angling for a return to City Hall.
"I can stand in any debate with him, on any stage with him," Dennerll, 79, said of the incumbent Jackson. "We can make an interesting campaign."
In a handwritten news release announcing his candidacy, Dennerll cited jobs, education and safety as three of his top concerns. In a phone interview, he said he plans to run a positive campaign, then threw a jab at Jackson for recently giving Forest City Enterprises honcho Sam Miller a key to the city. Miller, Dennerll said, has been "the unofficial mayor for 50 years."
NoLandGrab: A key to the city? In New York, Bruce Ratner has been given a key to the city's treasury.
Posted by eric at 10:32 PM
Sunday Morning Brownstoner Catchup
Brownstoner
Here are two overlooked entries from this past week:
Ratner Snags Another Property in Yards Footprint
Forest City Ratner closed on a 10,000-square-foot property at 467 Dean Street late last month, reports The Real Deal. The $3 million purchase was the company's first in the footprint of the proposed Atlantic Yards project since February 2007. While we're on the subject, we're surprised FCR hasn't gobbled up 670 Pacific Street yet. It's been on the market for a couple of months already.
Development Watch: 80 Dekalb Facade Spreading
 |
We saw the first signs of facade work going on at 80 Dekalb two weeks ago. Now look at it!
NoLandGrab: If only there were some way to avoid seeing this over-sized, publicly subsidized monstrosity.
Posted by steve at 7:46 AM
April 2, 2009
Forest City in the News
Earth Times, Fitch Downgrades 10 Classes of Gramercy Real Estate CDO 2005-1; Assigns Outlooks
Since last review, four loans paid off or were sold out of the CDO, one of which was sold at a discount to par. Also, four loans, as well as three CMBS assets were purchased. The added loans, which were all purchased at par, consist of a whole loan (4.7%) to an affiliate of the collateral manager secured by a portfolio of 81 office properties; a second mortgage (2.5%) secured by the Atlantic Yards land assemblage in Brooklyn, New York; a whole loan (1%) secured by an office property in Winston-Salem, North Carolina; and an A-note (0.9%) secured by a retail property located in Staten Island, New York.
NoLandGrab: Please don't ask us to explain this.
Las Vegas Sun, Development bills rebuff the logic of Vegas’ tax breaks
One of the central premises of the Culinary Union’s attempt to rein in the Las Vegas Redevelopment Agency is that the city is giving huge tax breaks to developers when it should be using those resources to better fund vital government services such as schools.
The union is fighting to put the issue before Las Vegas voters on June 2. Regardless of whether the Culinary is successful, like-minded state legislators may soon achieve some of the union’s goals for it.
...Another bill, sponsored by Assembly Speaker Barbara Buckley, D-Las Vegas, would take a more mandatory approach than Hardy’s bill. Assembly Bill 458 notes that municipalities often give tax credits or refunds to lure developers and other businesses to economic development zones. The bill would mandate that cities limit the breaks to taxes that do not fund public education.
This would limit the types and size of tax breaks the city gives to encourage downtown development, such as those to Forest City Enterprises for the proposed city hall and to CIM Group for renovation of the Lady Luck.
WCPN Radio, Civic Leaders Cautious About Convention Center/Medical Mart Project
Forest City's toadies friends in city government won't let the developer's bid for Cleveland's Medical Mart go down without a(n increasingly pathetic) fight.
Two weeks ago, Cuyahoga County Commissioner Tim Hagan counted out a proposal – seemingly once and for all - by developer Forest City Enterprises to build the dual purpose center on its property behind Tower City. Merchandise Mart properties Inc., the county’s private partner in the project, had decided on Mall B, where the current convention center sits, as the chosen site. All that needed to happen from there on was to wrap up negotiations on that site with the city of Cleveland, which owns it. But Tuesday, Cleveland mayor Frank Jackson emphasized that he would hold the County and MMPI to meeting a series of conditions before agreeing to proceed on the mall site – conditions like fair compensation to the city for use of the site, resolving potential conflicts between benefits to the public and MMPI, and that the facility provide enough space to meet the standards of the convention business.
Posted by eric at 9:41 AM
This guy was panhandled
The Brooklyn Paper, Police Blotter
by Mike McLaughlin
More crime in Forest City Ratner's allegedly crime-free malls.
A man and woman were arrested for assaulting a police officer inside the Daffy’s department store on Flatbush Avenue on March 29.
The troubles began at 2 pm when the man, 22, and the woman, 24, tried to bring a cat and dog into one of the other stores in the Bruce Ratner-run Atlantic Terminal Mall.
A security guard blocked them, so the couple scurried off with their critters to Daffy’s. A police officer followed them there, but a dispute arose, and the officer, a 35-year-old woman, received a laceration to her finger in the scuffling prior to arresting the animal lovers.
Posted by eric at 9:29 AM
Some Non-Union Workers still working at a portion of the Ridge Hill Property
Yonkers Insider Editorial
With the work stoppage at Forest City Ratner's Beekman Tower being linked to citywide attempts by developers to gain union concessions, and this report that non-union laborers are working on Forest City's Ridge Hill project, might unions that have backed the Atlantic Yards project rethink their unfettered support?
Sources tell The Yonkers Insider, that there is still non-union labor still working on one of the properties at Ridge Hill.
The question is didn’t the PLA (Project Labor Agreement) state that it was agreed to be 100% Union? Just asking the question. Where is Mayor Amicone, Bruce Ratner and other people who signed this agreement with the Unions?
Posted by eric at 9:17 AM
Ratner buys first AY property in two years
The Real Deal
by Gabby Warshawer
Forest City Ratner recently purchased a property in the Atlantic Yards footprint, the company's sole acquisition of property on the site of the delay-ridden Brooklyn project in more than two years.
The developer closed on 467 Dean Street -- the 10,000-square-foot New York City headquarters of the United Union of Roofers, Waterproofers and Allied Workers -- on March 20, according to public records. Ratner paid roughly $3 million for the building and went into contract for the property in mid-September 2008.
The developer last purchased property in the Atlantic Yards footprint in February 2007, according to city records made public last week. Although Ratner has bought up and demolished many of the properties in the Atlantic Yards footprint, a number of others are still in private hands, including those of nine property owners and tenants who are challenging the developer's intent to take control of them via eminent domain.
...[Daniel] Goldstein of Develop Don't Destroy Brooklyn said the purchase of 467 Dean underscored Develop Don't Destroy's belief that the developer is intent on controlling all the land in the Atlantic Yards footprint, despite the project's uncertain future.
"While Ratner struggles against litigation and the world economic crisis -- making it impossible to build what he's promised to build -- this sale makes it plainly obvious that Forest City Ratner's true goal is to control 22 valuable acres in the heart of Brooklyn with taxpayer assistance and the misuse of the state's eminent domain powers," he said. "If Forest City Ratner controls those 22 acres, it will not benefit anybody but Ratner, and that is what we are fighting against."
More coverage...
Gothamist, Ratner Buying More Land for Uncertain Atlantic Yards Project
Sure, architect Frank Gehry may be telling the press the embattled $4.2 billion Atlantic Yards project isn't going to happen, but Gehry doesn't speak for developer Bruce Ratner, who continues to double down on his dream to build a Nets basketball arena, office towers and thousands of apartments in Brooklyn.
...With AY construction currently stalled, it's unclear what Ratner plans to do with the property, but the president of his company promised yesterday that once one last eminent domain lawsuit is settled, "this project is ready to go."
Curbed, Pulse Detected at Atlantic Yards
Just in time for all the increased chatter about the further demise of Atlantic Yards, The Real Deal reports that developer Forest City Ratner closed on a privately-held building in the project's footprint, the first acquisition by Ratner in Yardsville since February 2007.
The Brooklyn Paper, Project stalled, but Ratner is still buying Yard land
Posted by eric at 9:07 AM
Forest City's Form 10-K signals a smaller arena, offers new warnings about loss of financing and sponsorships
Atlantic Yards Report
Norman Oder compares Forest City Enterprises' 2008 Form 10-K with the 2007 and 2006 versions, and notes some interesting changes.
While the annual Form 10-K documents filed by Forest City Enterprises with the Securities and Exchange Commission (SEC) contain boilerplate language about the risks facing the Atlantic Yards project, that language has changed somewhat, providing some significant hints about the developer's plans and concerns.
Notably, the developer no longer promises that the Atlantic Yards arena would be 850,000 square feet. A smaller arena would indeed be cheaper to build.
Also, the developer now acknowledges additional potential for increased costs and delays, for the first time warning of potential "inability to retain the current land acquisition financing" and "loss of arena sponsorships and related revenues." Forest City also warns about the possibility of failing to meet required equity contributions.
NoLandGrab: While Forest City marketing and PR execs are apt to stretch the truth, the financial folks are loath to trifle with the SEC.
Posted by eric at 8:27 AM
April 1, 2009
Deal to Cut Costs Is Close For Builders and Unions
The NY Times
By Charles V. Bagli
Reeling from the real estate downturn in the city, construction unions and builders are edging closer to an agreement that they say will reduce labor costs and enable at least some of their projects in Manhattan to proceed despite the weak economy.
...
Bruce Ratner, a developer who traditionally builds with union contractors, recently stopped at the 38th floor of his planned 76-story Beekman Tower in Lower Manhattan, threatening to cap the building at 40 stories if construction unions did not accept concessions on wages and work rules.Mr. Ratner, who is not involved in the current negotiations, stopped work for three months early last year while he scrambled to obtain $680 million in construction financing. At that time, he decided to switch from condominiums to rentals. In another cost-cutting move, he modified the design by the architect Frank Gehry, using a standard curtain wall instead of one that would seem to be undulating, on one of the tower’s eight sides.
Atlantic Yards Report, Brinksmanship with unions behind stall at the Beekman Tower
Yesterday, during a conference call with investment analysts, Forest City Enterprises CEO Chuck Ratner explained the stall at the Frank Gehry-designed Beekman Tower in Lower Manhattan.
"We have put additional vertical development on hold while we assess overall costs," he said. "Given falling construction costs, we have an opportunity to achieve savings on construction." Meanwhile, he said, work continues on the lower floors at the site, and the school and ambulatory care center will open as planned.
...
Ratner, [NY Times reporter Charles V.] Bagli writes, was not involved in current negotiations among developers and unions to modify work rules, wages and benefits to cut labor costs by 15 to 20 percent--less than the 25 percent sought be the real estate industry.Was that because others took precedence? You'd think that if he's serious about beginning construction this year on the Atlantic Yards arena, Ratner would want concessions.
Posted by lumi at 6:00 AM
Forest City in the News
NY Observer, First Manhattan Costco in Forest City’s East River Plaza
On a Tuesday morning Forest City Enterprises investors call, president and CEO (and cousin of Bruce) Chuck Ratner revealed that Costco Wholesale will open its first Manhattan store in East River Plaza, the development firm’s 500,000-square-foot mall set to open later this year on the plot of land bounded by 116th and 119th streets and the F.D.R. Drive. Costco already has outlets in Queens, Staten Island and Brooklyn.
The club store has assumed the 30-year (plus options) lease of Home Depot, according to Forest City spokesman Joe DePlasco.
NoLandGrab: Longtime readers may recall that Ratner double-crossed Costco back in September 2006, only to get burned by Home Depot last year.
The Cleveland Plain Dealer, Forest City Enterprises to manage, lease shopping center in Denver
Forest City Enterprises Inc. has signed a deal with investment management firm BlackRock Inc. to manage and lease a shopping center in southeast Denver.
The deal, reached Monday and announced during a Forest City conference call Tuesday, represents a new type of business for the real estate developer.
Crain's Cleveland Business, CEO says Forest City Enterprises assumes conservative posture
“Earnings don’t matter as much as liquidity,” Mr. Ratner said. “It’s all about survival, making sure you are around on the other side. This is the worst economy I’ve seen in the 44 years I’ve been with the company. Our focus is on completing projects under construction and making changes to become stronger. When conditions improve, Forest City will be a survivor and a leader.”
The comments are notable as they came the day after Forest City reported a loss of $45 million, or 44 cents a share, for its fiscal fourth quarter, which ended Jan. 31, compared to a profit of $12.6 million, or 12 cents a share, in the like period a year ago. It posted a net loss of $112.2 million, or $1.09 a share, for its fiscal year, compared with a profit of $52.4 million, or 51 cents a share, a year ago.
GlobeSt.com, Forest City Sees Per Share Decrease in Q4, 2008
“During the year, we addressed all of our approximately $842 million of 2008 loan maturities, with the exception of $13 million in loans still in negotiation with lenders,” Ratner says. “In addition, we have already made progress on addressing 2009 maturities.”
Brooklyn Daily Eagle, Intelligencer
In a conference call with investment analysts today, Forest City Enterprises executives maintained optimism about the Atlantic Yards arena but also hedged with some of their language, saying, “we are prepared to move forward” rather than committing with more certainty, according to the Atlantic Yards Report .
Posted by lumi at 3:36 AM
March 31, 2009
Chuck Ratner and Frank Gehry On Hope and Real Estate Development
Develop Don't Destroy Brooklyn
"Hope is not a plan."
-- Chuck Ratner, Forest City Enterprises President and CEO on the tough economic times during today's 4th Quarter conference callLast week, former Atlantic Yards archtiect Frank Gehry, referring to Atlantic Yards, said, "I don't think it's going to happen."
The next day the NY Post reported:
Gehry later backtracked through a publicist, saying his comments to the trade publication were "misconstrued as a prediction" about the project and that he remains "hopeful it will come to fruition."
Posted by eric at 8:41 PM
At conference call, Forest City executives say "we are prepared to move forward" on Atlantic Yards arena
Atlantic Yards Report
Norman Oder dialed in to Forest City Enterprises' earnings call this morning.
In a conference call with investment analysts today, Forest City Enterprises executives maintained optimism about the Atlantic Yards arena but also hedged with some of their language, saying "we are prepared to move forward" rather than committing with more certainty.
They were not asked any tough questions, such as whether architect Frank Gehry is actively working on the project.
Careful language on AY
CEO Chuck Ratner, in his prepared remarks, essentially repeated the message from yesterday's press release: "As you may have seen, we recently achieved another legal victory with the state appellate court upheld a prior State Supreme Court ruling related to public approvals and environmental review. We have one material lawsuit pending, and when we have cleared the legal hurdles, we are prepared to move forward with the first phase of development at Atlantic Yards."
He didn't predict a timeline.
Later, an investment analyst asked about the likelihood of Atlantic Yards, including potential alternatives or further revisions.
Joanne Minieri, president of subsidiary Forest City Ratner, responded, "As we’ve stated, once this litigation is resolved, this project is ready to go. We’ve worked diligently and actively on being prepared to proced with Atlantic Yards. We believe with respect to the arena there’s an opportunity in today’s market to finance it. We’ve done a lot of predevelopment work both on the site and in the soft cost area. On resolution of the litigation, we remain prepared to proceed."
There's also a lot of predevelopment work not done, since Forest City Ratner stopped working at the Vanderbilt Yard in December.
NoLandGrab: The absence of hard questions for Forest City executives from analysts who presumably have good working knowledge of the company's business is emblematic of why the world's economy has unraveled. If Oder had started Credit Default Swap Report four years ago, perhaps we wouldn't be in such a mess. Will City and State politicians with influence over Atlantic Yards learn from the failures of SEC regulators, and start paying attention?
Posted by eric at 8:17 PM
Forest City Financial News
Yahoo Finance, FCE-A
Continuing its slump, Forest City Enterprises traded down 8.9% to 3.41 just before yesterday's closing bell.
Fox Business News, REMINDER: Forest City Enterprises Fourth-Quarter and Full-Year 2008 Earnings Conference Call
4Q and 2008 earnings conference call TODAY:
Forest City Enterprises, Inc., (NYSE: FCEA; FCEB) has released its fourth-quarter and full-year 2008 financial results and will hold a conference call on Tuesday, March 31, 2009 at 11:00 a.m. ET to discuss these results. Investors are invited to dial into the conference call hosted by Charles A. Ratner, president and chief executive officer, or to listen to a live webcast of the call through www.forestcity.net.
Atlantic Yards Report, At today's conference call, will investment analysts finally ask FCE what exactly Frank Gehry is doing?
Norman Oder comes up with another crib sheet for investment analysts tracking Forest City Enterprises.
If the analysts don't ask some hard questions, they will sound ever more captive of the companies they cover, another example of the failure of the Wall Street ecosystem.
All signs indicate that Frank Gehry is no longer working on the Atlantic Yards project. Maybe they can just ask:
- Is Gehry still working on the project? How actively?
- Will he rehire staff to work on the project?
- Have other architects taken Gehry's designs and reworked them to save money?
In other words, is it still a Frank Gehry arena?
And maybe they can ask if Turner Construction, which produced the construction timetable and was called "a preeminent construction management company" in an affidavit by former FCR executive Jim Stuckey, is off the job, as a Curbed tipster suggested.
Tampa Bay Business Journal, Forest City reports full-year loss of $112 million
Revenues are down, losses are up:
Real estate developer Forest City Enterprises Inc., one of the two owners of Shops at Wiregrass in Wesley Chapel, reported a fourth-quarter net loss of $45.1 million, or 44 cents a share, compared to a year-earlier profit of $12.6 million, or 12 cents a share.
Revenue in the quarter fell 20 percent to $323 million from $404.4 million.
For the 12 months ended Jan. 31, Cleveland-based Forest City cited a loss of $112.2 million, or $1.09 a share, on revenue of $1.29 billion. The company reported net earnings of $52.4 million, or 51 cents a share, in the same period a year ago.
A small portion of the 2008 loss, about $8.6 million pre-tax, is attributed to severance costs associated with employee layoffs.
Posted by lumi at 4:17 AM
March 30, 2009
CurbedWire: A Double Dose of Gehry-Ratner Hookups
Curbed
It's just a rumor at this juncture, but Curbed is reporting that giant contractor Turner Construction is no longer involved with Forest City's Atlantic Yards project.
FINANCIAL DISTRICT—A tipster sends along an e-mail with a photo of Frank Gehry's Beekman Tower, which—given certain circumstances—should probably be called Fra Geh's Bee Tow. The e-mail was titled "Gehry's skin," but our tipster is a mysterious one. Is this old curvature or a new piece of the puzzle, indicating that actual work is going on down at 8 Spruce Street? Like we said, mysterious. [CurbedWire Inbox]
ATLANTIC YARDS—Speaking of Forest City Ratner-developed projects that may or may not still involve Frank Gehry, a tipster with some inside info has this to say about recent developments with the arena + towers plan: "Turner Construction is out as the contractor. And it's long been assumed that Ratner will not work with Bovis. So who will be brought in as a relief pitcher? And what could this project really be if the person that was leading the charge for all this time is gone?" [CurbedWire Inbox]
Develop Don't Destroy Brooklyn, Curbed Tipster: Turner Construction Off of Atlantic Yards Job
Small blurb from Curbed, but big news, if it is true.
No Gehry, no contractor...now what?
A tipster tells Curbed that the lead contractor for the Atlantic Yards project, Turner Contstuction, is off the job. Could that be why we saw a Turner Construction truck idling, with purpose, outside of Forest City Ratner's contractor condo offices in the former Spalding Building in the project site (24 Sixth Avenue)?
Posted by eric at 11:05 PM
Forest City Reports Fiscal 2008 Full-Year and Fourth-Quarter Results
Forest City Enterprises reported their 4th-Quarter and Full-Year earnings today, via a press release. It's a long document, which you can read by clicking the link below.
Bottom line, the company lost $112.2 million in 2008, versus a gain of $52.4 million in 2007. Forty percent of the losses occurred in the 4th quarter. The Nets continue to lose lots of money, and FCE is having to cover losses for certain "non-funding partners," as well.
But fear not, basketball fans. Despite companywide retrenchment, they haven't put everything on hold this year:
In 2009, we do not anticipate commencing construction on any new projects, with the exception of the arena at our Atlantic Yards project in Brooklyn, and a fee-based development project in Las Vegas.
NoLandGrab: In other New York-related plans, Forest City still says that the Beekman Tower "will have approximately 900 market-rate apartments," though they acknowledge that they have "initiated a study of costs and timing for Beekman to identify possible options to achieve savings on completion of the project."
Posted by eric at 12:03 PM
Forest City Enterprises announces losses, asserts that AY arena is one of only two new projects to launch in 2009
Atlantic Yards Report
It's a very busy day over at AYR. First the appeal of the environmental lawsuit, now Forest City's latest earnings report.
In another sign that the Atlantic Yards project is crucial to its struggling business, Forest City Enterprises (FCE) today announced in its year-end fiscal results that it would continue to significantly slow development, anticipating that it would commence construction on only two new projects, "the arena at our Atlantic Yards project in Brooklyn, and a fee-based development project in Las Vegas."
However, there are several doubts regarding arena construction, including pending legal cases disregarded by the developer and the availability of financing. While Forest City is indeed closer to starting construction than in previous years, consider that in 2007, for example, FCE CEO Chuck Ratner and other executives asserted that the arena would open in 2009, and New Jersey Nets CEO Brett Yormark has consistently shifted the goalposts.
In fact, in a 10-K document filed today with the Securities and Exchange Commission, the developer acknowledges that 2011 is hardly certain:
The Nets are currently operating at a loss and are projected to continue to operate at a loss at least as long as they remain in New Jersey, which is expected to be until at least 2011, and possibly longer.Other delays
The 10-K document also acknowledges the potential for continued delays:
Brooklyn Atlantic Yards. We are in the process of developing Brooklyn Atlantic Yards, a long-term $4.0 billion mixed-use project in downtown Brooklyn expected to feature a state of the art sports and entertainment arena for the Nets basketball team, a franchise of the NBA. The acquisition and development of Brooklyn Atlantic Yards has been formally approved by the required state governmental authorities but final documentation of the transactions are subject to the completion of negotiations with local and state governmental authorities, including negotiation of the applicable development documentation and public subsidies. Pre-construction activities have commenced for the potential removal, remediation or other activities to address environmental contamination at, on, under or emanating to or from the land. There is also one lawsuit pending challenging the use of eminent domain which may not be resolved in our favor resulting in Brooklyn Atlantic Yards not being developed at all or not being developed with the features we anticipate. As a result of the foregoing, this project has experienced delays and may continue to experience further delays. There is also the potential for increased costs and delays to the project as a result of (i) increasing construction costs, (ii) scarcity of labor and supplies, (iii) our inability to obtain tax-exempt financing or the availability of financing or public subsidies, or our inability to retain the current land acquisition financing, (iv) our or our partners’ inability or failure to meet required equity contributions, (v) increasing rates for financings, (vi) loss of arena sponsorships and related revenues and (vii) other potential litigation seeking to enjoin or prevent the project or litigation for which there may not be insurance coverage. The development of Brooklyn Atlantic Yards is being done in connection with the proposed move of the Nets to the planned arena. The arena itself (and its plans) along with any movement of the team is subject to approval by the NBA, which we may not receive. If any of the foregoing risks were to occur, we may not be able to develop Brooklyn Atlantic Yards to the extent intended or at all. Even if we are able to continue with the development, we would likely not be able to do so as quickly as originally planned.The importance of AY
Atlantic Yards has a significant upside for the developer, not only the control of a "great piece of real estate" (in Chuck Ratner's words) but the opportunity to stanch significant losses on the operation of the Nets, $35 million in the past year. A new arena would bring new revenues and also raise the value of the team, which has actually declined since an ownership group led by Forest City Ratner's Bruce Ratner bought the team in 2004.
So Atlantic Yards will be a fight to the finish, as the developer anticipates "continued challenging business conditions in 2009."
The remainder of the article briefly parses some of the highlights of FCE's earnings report, as they relate to Atlantic Yards.
Posted by eric at 10:41 AM
March 28, 2009
Springtime in Ratnerville
Posted by steve at 7:06 AM
March 27, 2009
Ratner says Gehry tower will keep rising
Downtown Express
By Julie Shapiro
Word spread quickly last week that Forest City Ratner planned to chop the rising Beekman St. tower in half, leaving it at its current height of 38 stories.
The rumors started when workers recently stopped adding floors and WNYC reported that contractors applied for a permit to add a roof.
Joyce Baumgarten, spokesperson for Forest City, said the rumors are exaggerated. The permit was actually for the tower’s first setback, not for the roof, she said. The permits look similar, which could have caused the confusion, she added.
Baumgarten said the addition of new floors had paused so Forest City could look for ways to save money, possibly by re-bidding construction contracts. She is not worried about finding a market for the building’s 903 apartments, which will range from $4,000 to $15,000 a month.
“There’s been no change in the design of the building,” Baumgarten said in a phone interview. “Work is continuing on the building.”
In a statement, Baumgarten added, “Given current economic conditions, including downward trends in construction costs, we are conducting a study to evaluate potential opportunities to achieve savings on the project.”
NoLandGrab: On the other hand, nothing in Baumgarten's statement actually precludes topping out the building at 38 stories, so stay tuned...
Posted by lumi at 5:25 AM
March 24, 2009
Forest City in the News
PR Newswire, Forest City Enterprises Notice of Fourth-Quarter and Full-Year 2008 Earnings Conference Call
CLEVELAND, March 23 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc., (NYSE: FCEA) (NYSE: FCEB) will release its fourth-quarter and full-year 2008 financial results on Monday, March 30, 2009, and will hold a conference call with investors on Tuesday, March 31, 2009 at 11:00 a.m. ET to discuss these results. Investors are invited to dial into the conference call hosted by Charles A. Ratner, president and chief executive officer.
The conference call is scheduled for 11:00 A.M. ET, Tuesday, March 31, 2009. To participate, dial 888-679-8034 using access code 18297673, approximately five minutes before the call. Tell the operator you wish to join the Forest City 4th Quarter Earnings Conference Call. (International callers, please dial 617-213-4847)
A live webcast of the call will also be available online at www.forestcity.net.
Please use the following link to pre-register for this conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. You may pre-register at any time, including up to and after the call start time.
To pre-register please go to: https://www.theconferencingservice.com/prereg/key.process?key=P8K9QVFQF
The call will be replayed from March 31, 2009, 2:00 P.M. ET to April 30, 2009, 11:59 P.M. ET. The replay number is 888-286-8010, access code 88419381. (International callers, please dial 617-801-6888) The webcast replay will be available at www.forestcity.net .
If you have questions, please call AnnMarie Fenske at Forest City, 216-621-6060.
Brownstoner, A Touch of Glass for 80 Dekalb
The bay windows are being installed as work continues on Forest City Ratner's 80 DeKalb Ave. project:
Sometime between last Tuesday, when we posted Development Watch, and this weekend, when we drove by again, 80 Dekalb got its first windows and facade panels. Interestingly, they are not a flush design; instead they are three-sided, like half a hexagon, meaning that all those protrusions are going to be interior, not little balconies.
GlobeSt.com, TOD Stalled, Not Forgotten
A Forest City exec at a panel discussion on transit-oriented developement hosted by the Urban Land Institute is keeping an eye on the next wave:
“The last transit-oriented boom was really driven by condos, but during the next upturn, what’s going to be the market driver?”
Answers included mixed use, and small community centers. [Senior VP of development for Forest City Residential Inc. Renata] Simril’s answer: “The 75 million eco-boomers who are entering college now. They are going to be the next wave of renters.”
NoLandGrab: Simril likely said or meant "echo-boomers." To say that the recent transit-oriented boom was really driven by condos is overlooking the fact that the boom was actually fueled by access to easy credit. While it is helpful to look at demographic data, that's only part of the picture.
Simril also likely said or meant "7.5 million," not 75 million. The US Census Bureau currently estimate total college enrollment at 15.9 million students. Of course, Atlantic Yards watchers know well that Forest City sometimes plays loose with the "facts."
FCE-A climbs back over $4 mark
Trading on average volume, common stock in Forest City Enterprises spent the day trading above $4, to close at $4.80 (not like we're paying attention or anything).
Posted by lumi at 5:12 AM
March 23, 2009
Forest City in the News
Though we're trying to keep track of news about other projects being developed by Forest City Enterprises, the parent company of Atlantic Yards developer Forest City Ratner, here's one story we missed earlier this month, which includes an interesting twist.
MARCH 2 — Forest City Enterprises announces that The Village at Gulfstream Park secures tax-incremental financing (TIFs), where future gains from the taxes generated by the project are used to retire the debt. The project is being developed jointly by Forest City Enterprises and Manga Entertainment.
PR Newswire, Forest City Reaches Agreement on Tax-Increment Financing, Announces 32 Tenants for The Village at Gulfstream Park
CLEVELAND, March 2 -- Forest City Enterprises, Inc. (NYSE: FCEA) (NYSE: FCEB) today announced that it has reached agreement with the City of Hallandale Beach, Fla., for up to $900,000 per year for 15 years of tax-increment financing (TIF) for The Village at Gulfstream Park, a 490,000 square foot, high-end retail and entertainment destination currently under construction in the City. The Company also announced 32 top-tier tenants for the center, which is expected to open in the first quarter of 2010.
Commenting on the TIF agreement, Charles A. Ratner, Forest City president and chief executive officer said, "This is a milestone in our relationship with the City of Hallandale Beach and represents the creation of a true public-private partnership to make the Village at Gulfstream Park a reality. Given continuing challenges in the credit markets, creative solutions such as this are needed to ensure the strength and viability of new development. We deeply appreciate the commitment this represents on the part of the City. Today's tenant announcements are the first of many steps in returning that commitment."
Proceeds from the TIF will be used to assist in retiring debt incurred by the project for infrastructure improvements.
...
The Village at Gulfstream Park is located on Florida's Atlantic coast, between Miami and Ft. Lauderdale, on U.S. Route 1, less than two miles east of Interstate 95. It is anchored by Florida's premier thoroughbred racing track, and is being developed by subsidiaries or affiliates of Forest City and Magna Entertainment Corp.
Co-Star Group, Village at Gulfstream Park Opening in 2010
GlobeSt.com, Gulfstream Park Project Secures TIF
MARCH 6 — A local paper reports that the project is bucking national economic trends.
South Florida Times, Shops, theater, nightclub coming to Gulfstream Park
Although the country is in the midst of a national economic situation, the Village at Gulfstream Park is currently in the process of constructing Phase 1 of the $244.7 million project that will bring more than 13 restaurants, 17 shops and two upscale and trendy night clubs to the establishment.
Large cranes hang high over the skies of 201 South Federal Highway in Hallandale Beach, and men in yellow hardhats continue to layer block over block, as the general manager of Gulfstream Park, the developers of Forest City Commercial Development and the retailers wait in hope and anxiety for the final product.
The vision is to have the Village at Gulfstream Park be the leisure, fashion and entertainment destination in South Florida with quality dining, exceptional retail outlets, exciting entertainment and of course, one of America’s thoroughbred racing facilitie
MARCH 6 — Magna Entertainment, the largest owner and operator of thoroughbred racetracks in the nation, filed for Chapter 11 bankruptcy. Forest City offers a grim reminder of Magna's "obligations."
The Miami Herald, Gulfstream Park's owner seeks Chapter 11 bankruptcy
Magna Entertainment, the nation's largest horse track operator -- and owner of South Florida's Gulfstream Park -- has filed for Chapter 11 bankruptcy protection and will sell Gulfstream as part of a deal to keep its racetracks open.
...
Nevertheless, Magna's bankruptcy filing does raise questions about Gulfstream's future. To keep its racetracks open, the company arranged a six-month, $62.5 million financing package through a subsidiary of MI Developments, Magna's largest shareholder.That deal also calls for Magna to sell Gulfstream and other properties to either MI Developments or a third party that may emerge during the Chapter 11 process in Delaware.
Though South Florida's housing market is in a slump, Gulfstream's Hallandale Beach property is highly valuable, which could prompt interest from developers.
...
So far, the project is only 50 percent leased. Ultimately it will have 70 stores covering more than 410,000 square feet of retail and entertainment space, plus 80,000 square feet of office space.Magna partnered with Forest City Commercial Group on The Village. Brian Ratner, who heads Forest City's East Coast development team, said of Magna, "They've honored their obligations and we expect them to continue to do that.''
As an outsider, it's difficult to conclude where this leaves Forest City. However, we know that this is one of the few Forest City projects on which work has continued, and that executives in Cleveland who are "proactively managing debt maturities" didn't need another cloud of uncertainty hanging over their heads. Though Brian Ratner keeps his cool, you have to wonder if Magna will continue to honor its obligations, when the reason for filing for Chapter 11 in the first place is to find relief from just such obligations.
Posted by lumi at 5:22 AM
March 22, 2009
Forest City in the News
Atlantic Yards Report, In Baltimore, Forest City's project is stalled, too
Norman Oder analyzes a story from National Public Radio's Marketplace (Bad economy stalls Baltimore makeover) about Forest City Enterprises' Science + Technology project.
Half the labs aren't operating; Forest City's leasing head Scott Levitan says, "The challenge now is to ride out the storm, get over the Valley of Death."
The problem: the business model has changed in just three years, as big firms have chosen to buy smaller ones than invest in basic research.
Meanwhile residents who sold their homes for the project are waiting for the promised replacements, but rehabbed houses still await construction loans from banks.
...
Levitan says Forest City has invested $47 million, while the city, the state, and philanthropic partners have put up $120 million--a nice deal compared to Atlantic Yards, where the direct investment vs. direct subsidy would $250 million vs. $305 million, except that the other public benefits total hundreds of millions, perhaps more than a billion dollars.
Which means Forest City isn't walking away.
Let's go to the tape:
LEVITAN: No, ha, ha, ha. We're not.A nervous laugh about an ambitious project trying to tough out the recession
They're not walking from AY either, I'd bet. It could be Forest City's last project standing
Posted by steve at 8:53 AM
March 21, 2009
Ratner May Cut Gehry Beekman Tower in Half
Yonkers Tribune
Yesterday's Develop Don't Destroy press release finds its way to Yonkers, home of Forest City's Ridge Hill development.
The inability to complete more than half of a single tower in Manhattan—propped up financially by Liberty Bonds from New York City’s Housing Development Corporation—does not bode well for Forest City Ratner’s Atlantic Yards mega-project.
Posted by steve at 7:34 AM
March 20, 2009
Beekman Street Tower, questions and speculation
The news reported yesterday by WNYC and Crain's NY Business that Forest City Ratner (FCR) might chop the Beekman St. Tower in half at 38 stories has raised many questions and fueled some local speculation.
Here's a quick round-up of responses:
DDDB.net, If Ratner Can't Do Beekman Tower, How on Earth Can He Do Atlantic Yards?
Develop Don't Destroy Brooklyn, the coalition group spearheading the fight against FCR's Atlantic Yards in Brooklyn, had this to say:
So. Let's see. Forest City Ratner, it appears, is going to stop 38 stories short of its 76-story, 900-unit Downtown Manhattan, Frank Gehry designed tower, which is already well underway. But the same Forest City Ratner claims it can finance and build a one-billion-dollar-18,000-seat arena and 16 skyscrapers including a hotel, an office tower and 6,430 units of housing, aka the as-of-yet commenced $4 billion Atlantic Yards project.
And the only things stopping the Atlantic Yards project are lawsuits...so they say.
Atlantic Yards Report, If FCR's Beekman Tower faces 50% cut, what does that say about Atlantic Yards promises (and designs)?
Watchdog journalist Norman Oder posted a news round-up along with some important questions and analysis:
What value would remain at 38 stories?
Though a 38-story Beekman Tower would surely represent an enormous compromise for Gehry's vision, it still could find a place in the market. "We're selling views," [FCR executive MaryAnne] Gilmartin said last October. "From the moment you step into the apartment, you see sky.” Each apartment has three vistas, “which is extraordinary… When you clear the 11th floor, there’s not much to compete with it.”
What is to become of the Liberty Bond financing?
The $680 million in financing for the project—the largest construction loan in the company’s history (according to the Trib)--was announced a year ago.
The bonds issued by the New York City Housing Development Corporation (NYC HDC) are a combination of $190 million in tax-exempt Liberty Bonds, aimed to revive Lower Manhattan, and $476.1 million in taxable bonds. The New York State Housing Finance Agency contributed $13.9 million from its Liberty Bond allocation.
...
I asked NYC HDC spokesperson Catie Marshall yesterday how much the developer would be allowed to spend. "The funding for a project such as the Beekman is generally done in tranches, thus it is phased (sort of pay-as-you-go)," she responded. "In the case of the Beekman, the bonds are variable rate and only the first two tranches have been issued. In general terms, if a project is altered and does not need all of the funding, the remaining tranche(s) will not close. It’s pretty straight forward."
The Tribeca Trib, Ratner: 76-story Beekman Tower Design Not Shrinking, Yet
The Trib reports that FCR claims that the design HASN'T changed:
WNYC reported that the city’s Department of Buildings issued the developers a permit for work to be done on the roof of the building. The report concluded that the permit “treats the top of the current [38-story] structure as a roof.”
According to the developers, the “roof” referenced in the permit is actually the first of three setbacks included in the building’s design, not the proposed top of the tower.
“The design has not changed,” a company spokeswoman said.
Curbed.com, Trouble Surfacing at Frank Gehry's Beekman Tower
That's "trouble" with a capital "T" that rhymes with "B" that stands for "Beekman":
...the underlying meaning is clear: Things aren't quite going as planned at the legendary starchitect's signature addition to the New York City skyline. Is Bruce Ratner just playing hardball with unions, or with the government to get added subsidies? Hopefully. Real estate bust or not, what would a half-built skyscraper left rotting near the Brooklyn Bridge do to the image of the Financial District as a reborn residential neighborhood-on-the-rise? Or, if it's completed at half its envisioned size, to the legacy of Gehry?
Posted by lumi at 6:36 AM
Beekman Street Stumped
The big news yesterday was Forest City Ratner's (FCR) admission that the company was "conducting a study to assess costs, risks and overall timing" for the Beekman St. Tower project. That's developerspeak for "salvaging a project that's already under construction."
If FCR actually caps off the Beekman St. tower at a stumpy 38 stories, the building would become a highly visible iconic stump, noteworthy for what it is not. However, it is equally noteworthy that FCR might consider downsizing a project for which it has already secured financing.
A clearer picture is beginning to emerge of a company that has endured waves of layoffs, has been scrambling to renegotiate looming debt obligations, and has halted or slowed construction wherever possible. All outward appearances indicate that parent company Forest City Enterprises could be experiencing a dire cash-flow problem. [If we're wrong, then the company should stop acting like that's the case.]
This also might explain why FCR has been loudly proclaiming its commitment to the Atlantic Yards arena and high-rise project in Brooklyn, while trying to sell off some of its better performing income-producing assets. The real estate company is already stuck with the money-hemorrhaging NJ Nets, but the rest of Atlantic Yards is stalled and has relatively limited overhead costs (aside from lobbyists), and may represent the company's best opportunity for growth if it can weather the current financial storm.
With 4th-quarter results due out in April, it will be interesting if the conference call with analysts will be more business as usual, or if institutional investors will manage to get some real answers as to where this company thinks it is headed.
Posted by lumi at 5:44 AM
Forest City Stockwatch
Though overexamining the daily trading activity of a single stock can be uninformative in the overall scheme of things, we noticed that somebody (or somebodies) was dumping shares of Forest City Enterprises (NYSE: FCE-A) late yesterday (March 19, 2009).
FCE-A traded in a narrow range almost all day, then, on late spiking volume, traded lower by several percentage points, to close just below the $4 mark. Just before the closing bell, more than a quarter of a million shares traded around $4 a share.
[Click graphic to enlarge.]
We're wondering if this could this have been a panic sell based upon news that Forest City might cap off the "iconic" Frank Gehry-designed Beekman St. Tower at a mere 38 stories, or if shorts like Metropolitan Capital Advisors' Karen Finerman are anticipating further troubles.
Posted by lumi at 5:14 AM
Forest City in the News
The Cleveland Plain Dealer, Merchandise Mart developer tells Forest City to get out of the way; says mall site is superior to Tower City
It appears that no amount of whining will get Merchandise Mart to agree to a deal to build on land owned by Forest City Enterprises (parent company of Atlantic Yards developer Forest CIty Ratner), but that hasn't stopped the increasingly desparate development company from trying to force a deal.
Merchandise Mart Properties Inc. rejected Forest City's offer to sell property behind Tower City, listing 17 reasons for the decision. Then MMPI asked the Cleveland-based firm to get out of the way and let the complex be built beneath downtown's historic mall.
"The mall site is so clearly superior to the Tower City site," MMPI Senior Vice President Mark Falanga said in a phone interview. "Forest City's got to recognize this. They've got to allow the process to move forward and accept the reality."
Fresno Bee, Downtown doesn't need Forest City's help
While the City of Fresno was waiting on Forest City Enterprises to transform a portion of the downtown area, economic revialization was happening without the subsidy-sucking eminent domain-abusing mega-development company. Now that Forest City has left the city at the altar, folks are recognizing the importance of organic redevelopment.
No, downtown Fresno has not been waiting idly for Forest City.
Ask the people behind Kebab Express (2139 Kern St.), Fresno's Newsroom Café (901 L St.) and the new Teazer World Tea Market at the Galleria (2405 Capitol Street #104) -- all three are new downtown businesses opening this month.
If this Forest City fracture does anything, it opens up opportunities for more local business to thrive in downtown Fresno.
Many places in Forest City's 85-acre radius were left in business purgatory, awaiting news on whether they'd fit in Forest City's plans ... or not.
So again, we don't need Forest City.
We've got people.
Posted by lumi at 4:58 AM
Developer cuts tower from 76 stories to 38
Gehry Tower near City Hall put on hold 38 stories short of goal
Crain's NY Business
by Amanda Fung
The Beekman Tower, the Frank Gehry-designed luxury rental building in lower Manhattan, has been put on hold 38 stories short of its planned height of 76 floors.
Developer Forest City Ratner Cos. says that work will continue on the lower stories, but added that no additional floors will be added pending an evaluation of costs.
The tower will have a 100,000 square-foot public school for pre-K and eighth graders, ground floor retail space, and an ambulatory care center for its next door neighbor—the New York Downtown Hospital. The building was to have roughly 900 apartments with stunning views of lower Manhattan and the nearby Brooklyn Bridge and was expected to open next year.
“Given the current economy, we are conducting a study to assess costs, risks and overall timing,” said a spokesperson for the company, in a statement. “Work is continuing on the building including on the school and we should have some conclusive answers shortly.”
...Last year, Forest City Ratner closed $680 million in financing for the mixed-used development—the largest construction loan in the company’s history. It was seen as one of the few projects in the city that was bucking the overall real estate meltdown as construction continued. Construction on the foundation of the Beekman Tower began in 2006.
Posted by eric at 1:31 AM
March 19, 2009
Downtown Housing Complex May Downsize
WNYC Radio
by Matthew Schuerman
WNYC is reporting this morning that Bruce Ratner's Beekman Tower project in downtown Manhattan may be getting some serious value-engineering — as in, cut in half.
At 76 stories, the Beekman Tower on Spruce street was supposed to be the tallest residential building in New York City. But the developer may stop work at half-the-height because of the poor economy. WNYC's Matthew Schuerman has more.
REPORTER: The sleek, narrow tower, designed by world-renowned architect Frank Gehry, was to include 900 luxury apartments. It was billed as part of the post September 11th recovery for Lower Manhattan. The developer, Forest City Ratner, qualified for extra height by including a school in its bottom floors.
But Ratner may not need that extra height after all. This week, shortly after the structural concrete reached the 38th floor, the developer received a building permit that treats the top of the current structure as a roof.
Neighbors report that consutrction has slowed to just six hours a day. A spokesperson says Ratner has made no final decisions, but is "conducting a study to assess costs, risks and overall timing."
NoLandGrab: If WNYC's report is correct, Frank Gehry will likely not be a happy camper. And if this is what they mean by "value engineering," should we anticipate an Atlantic Yards arena in which the games are played on a half-court?
Posted by eric at 8:52 AM
Forest City selling three NYC movie theaters, Queens Place mall
Atlantic Yards Report
Which NYC properties did the parent company of Atlantic Yards developer Forest City Ratner put on the auction block to raise much-needed cash?
A reader put me out of my misery by forwarding the actual coverage in the newsletter Real Estate Alert:
Eastdil is also marketing the retail properties, which are in three outer boroughs of New York. The largest is Queens Place, in the Elmhurst section of Queens. The 222,000-sf vertical power center, built in 2001, is filled by big-box stores, including Target, Best Buy and shoe retailer DSW.
Also being offered is The Heights on Court Street in Brooklyn (102,000 sf). The property is occupied by a United Artists movie theater and a Barnes & Noble book store. United Artists also leases the other two retail properties up for grabs: the 84,000-sf Steinway Street Theaters in the Astoria section of Queens and the 70,000-sf Forest Avenue Cinemas on Staten Island.
NoLandGrab: It's nice to know that real estate industry folks are reading Norman Oder's blog. Certainly Bruce Ratner would prefer that was not the case.
For you non-industry folks, "vertical power center" is a euphemism for "mall," which is apparently a four-letter word in the real estate world. Our favorite is still "regional lifestyle center," which as far as we can tell is a large outdoor mall.
Posted by lumi at 6:10 AM
Forest City in the News
For some reason, Forest City Enterprises's Tower City Medical Mart proposal was so important to the company that they insisted on going back to the developer, Merchandise Mart Properties, with a revised proposal, only to lose out a second time.
The Cleveland Plain Dealer, Medical mart developer rejects Tower City site as 'nonstarter'
Mark Falanga, senior vice president of Merchandise Mart Properties Inc., said in letters to Cuyahoga County commissioners and Tower City owner Forest City Enterprises that a number of factors make the site a "nonstarter."
wkyc.com, Cleveland: Medical Mart planners reject Tower City site
CLEVELAND -- MMPI, the Chicago firm seeking to build the Medical Mart/Convention Center project is reaffirming its commitment to the site on the malls and resoundingly rejecting Forest City's proposal behind Tower City.
MMPI's MarK Falanga wrote Forest City and County Commissioners calling the Tower City site a non-starter citing sixteen specific issues including reconfiguring the Cuyahoga River, the site's size, inadequate meeting rooms, undesirable views, possible soil contamination and questions about Forest City's estimated costs.
The Cleveland Plain Dealer, Fair questions about Cleveland's med mart deserve detailed answers -- editorial
Forest City Enterprises's campaign to discredit the winning backroom deal has put doubt in the minds of the editorial board of Cleveland's main citywide daily.
Yahoo Finance, FCE-A
Last we checked, Forest City Enterprises was still trading below five bucks a share.
Posted by lumi at 4:55 AM
March 17, 2009
Three months later, Morningstar again says Forest City Enterprises stock is worthless
Atlantic Yards Report
Even though Forest City Enterprises tried to discredit Morningstar's previous analysis that downgraded the company's stock rating to nearly worthless, it didn't prevent Morningstar from reasserting its position, though other industry analysts disagree:
It looks like déjà vu from December. An analyst from Morningstar, in a report (subscribers-only) that repeats nearly verbatim the conclusions in a report issued three months ago, yesterday again warned that stock from Forest City Enterprises (FCE), parent company of Forest City Ratner, is essentially worthless.
And, most likely, company representatives will fire back, as they did in December, by contrasting Morningstar's take with more optimistic assessments from other analysts and pointing out that the Morningstar analyst didn't speak to them.
Indeed, for the past three months, five analysts tracking FCE have consistently rated the stock (FCE.A) as a buy, or 2, on a scale of 1 (Strong Buy) to 5 (Sell), according to Yahoo Finance.
Specifically, two called it a Strong Buy (1), one called it a buy (2), and two recommended Hold (3). No one rated it Underperform (4) or Sell (5).
Posted by lumi at 6:07 AM
What does Forest City have on the block in New York City?
Atlantic Yards Report
Forest City Enterprises is apparently in the position where it feels it has to sell off some of its premium performing assests, including four retail properties in NYC.
Norman Oder surveys the online list of Forest City's NYC holdings and speculates about which ones the company has decided to hold.
There are no Forest City Ratner listings publicly available via either the CBRE or the Holliday Fenoglio Fowler web sites.
I've listed the properties below, in the order they appear on the FCE web site. I'll bet that the 42nd Street Complex, Atlantic Center Mall, and Atlantic Terminal Mall are untouchable, because the latter two would benefit enormously from Atlantic Yards and the Times Square location is prime.
(Remember, as the New York Times Magazine told us Sunday, in an articled headlined Where Is the New Brooklyn?, Brooklyn is a euphemism for gentrification,)
The Shops at Atlantic Center Site V aren't on the block, either, because a) FCR doesn't control all the land and b) the site is in the Atlantic Yards footprint. The Museum of Jewish Heritage is a small retail space.
The rest is up for grabs. I don't know enough about the retail market, nor FCR's sense of core efforts, to know whether movie theaters--which do reasonably well in bad economics, right?--are more or less likely to be sold.
But Forest City has a lot more property than you might think.
Posted by lumi at 6:03 AM
Forest City in the News
The Cleveland Plain-Dealer, New med mart doubts raised as final decision on site nears
Forest City Enterprises takes its campaign to save its Tower City Medical Mart proposal directly to the Cleveland media by trash-talking a competing plan proposal:
Cleveland's historic downtown mall would undergo dramatic change if a new convention center is built below, according to a Forest City Enterprises executive.
The underground complex would elevate sections of the mall as much as 10 feet above Lakeside Avenue, further obstructing views of Lake Erie, said Forest City Co-Chairman Al Ratner, in a meeting Monday with Plain Dealer editors and reporters.
The mall would turn into a collection of walls and stairs, disrupting the century-old vision of architect Daniel Hudson Burnham, said Ratner, who is pushing his company's competing site behind Tower City for a combined medical mart/convention center.
KFSN, Forest City Gone- Mayor Trying to Move Forward
Fresno tries to move on after being left at the altar by Forest City Enterprises.
Posted by lumi at 5:31 AM
March 16, 2009
Forest City in the News: Financial Straits Edition
When any company starts cannibalizing its holdings of revenue-producing assets and begins pulling back on its most successful, award-winning projects, then it's hard to come to any conclusion other than the company executives are doing massive triage to keep things afloat.
LAYOFFS AT TOP PROJECTS
Last week, New Mexico Business Weekly reported that Forest City cut its Mesa del Sol staff in half. The same tsunami of layoffs also hit Forest City's other award-winning megaproject:
DenverPost.com, Forest City chops down jobs
Forest City Stapleton, the master developer of the Stapleton residential and retail area, has laid off seven employees, according to sources.
DUMPING PREMIUM PERFORMING ASSETS
When a company has to raise cash in a tough economy, it is forced to start dumping the good stuff.
Crain's Cleveland Business, Forest City puts desirable assets in play
Over the last few years, Forest City has sold hundreds of millions of dollars of assets in a process CEO Charles Ratner described last April as “selling from the bottom” to prune properties with limited growth opportunities. It relinquished better properties only when it could get “a very, very good price,” he said at the time.
Forest City now is marketing a portfolio that’s the opposite of prior dispositions — it consists of gem office and retail buildings in superior markets and apartments in hot rental markets. And it’s trying to sell in a battered market where it will be hard to achieve a very, very good price.
The industry newsletter Real Estate Alert reported in its March 11 issue that Forest City is offering for sale or seeking to recapitalize 10 apartment buildings with a total of 4,000 suites in markets from Washington, D.C., and Philadelphia to San Jose.
Also on the block with the CB Richard Ellis and the Holliday Fenoglio Fowler brokerages are four retail properties in New York City and a stake in the 2.4 million-square-foot office component at the University Park mixed-use complex in Boston.
The trade newsletter said Forest City hopes to garner $1.15 billion from the sales.
NoLandGrab: And when the "good stuff" is on the auction block, it's gotta make you wonder if the NJ Nets are for sale as well, despite team executives' assertions to the contrary.
A CAUTIONARY TALE
What happens when a city stakes an urban renewal plan on a single development company, which, though it has a track record of completing projects, finds itself in financial straits?
Things are worse than before: businesses under threat of eminent domain have moved, the local economy loses years when a more incremental, diversified master plan could have been implemented, and the city is left holding the bag.
KFCN, Commercial Hope For Downtown Sans Forest City
Thanks to developer Forest City Enterprises and the Fresno City Council, the day of reckoning has come for Fresno, which now has to consider its next steps.
Some believe downtown could still get that different look even without a big developer. Commercial real estate broker Victoria Gonzales has a handful of clients whose business plans for growth and expansion over the last 5 years stalled out.
Many, like this bike shop, were forced to move because the uncertainty surrounding Forest City's construction plans.
"We've seen business leave, and businesses go out of business and property owners who can't sell their properties," she said.
Gonzales said the signs of a nearly abandoned commercial district are everywhere.
Posted by lumi at 5:54 AM
March 14, 2009
Forest City In The News: Forest City Plan In Fresno Ends
Due to a $100 million "financial gap" (the difference between money that Forest City is willing to spend and that the government is willing to hand over), Forest City has canceled its Fresno project. For the moment, businesses in the former project area get a respite from the threat of the use of eminent domain.
Forest City In The News: Forest City Enterprises cancels downtown Fresno project
The Fresno Bee
By Denny BoylesForest City Enterprises has abandoned plans for a $300 million project in downtown Fresno that would have brought housing and commercial businesses to an 85-acre area south of Chukchansi Park, the company announced today.
The company has had an exclusive development deal with the city of Fresno since 2004, but was unable to close a $100 million gap in funding for the South Stadium project.
Support for the project was strong on the City Council, which in December agreed to extend its exclusive negotiation agreement with the Cleveland-based developer for six more months.
More coverage, below, courtesy of Atlantic Yards Report, including an indication of why Forest City will continue pushing for Atlantic Yards.
Three months after pledging commitment, Forest City pulls the plug on Fresno projectlink
Though developer Forest City Enterprises (FCE) in December maintained it was committed to a $300 million housing and office project in downtown Fresno, CA, yesterday FCE announced it has abandoned the project.
The key issue, apparently, was the inability to secure state and federal subsidies, despite the developer's effort to make cuts.
...
The city's new mayor, Ashley Swearingin, was no fan of the project, but the real gap seems to be the failure to find $100 million in state or federal funds to fill that budget gap. The Bee reported in December that the six-month extension gave the developer time to pursue state and federal money.
Forest City apparently has no spare cash; just this week reports emerged about the company's effort to sell 15 properties.
There's a subsidy gap for Atlantic Yards, as well. However, New York City, especially Brooklyn, is a core market for the developer, and there's a significant upside to AY--or, at least, the erasure of a significant downside: the massive losses suffered via ownership of the Nets.
Posted by steve at 8:32 AM
March 12, 2009
Purchase of FCE bonds, sale of FCE properties suggest corporation faces unsteady fate
Atlantic Yards Report
Norman Oder follows up on news of purchases of Forest City debt and the company's efforts to sell several of its properties around the country.
The Cleveland Plain Dealer, citing newsletter Real Estate Alert, says that FCE is seeking buyers for 15 properties: 10 apartment properties, four shopping centers and the office portion of University Park at MIT, a mixed-use development at the Massachusetts Institute of Technology in Cambridge, MA.
Four shopping centers? I'll bet none are in Brooklyn, NY, where synergy is a goal. One reason why FCE values Atlantic Yards is it would increase the value of the Atlantic Terminal and Atlantic Center malls across Atlantic Avenue.
Another is that AY would not only stem significant losses in operating the Nets, but it would raise the value of the team.
So FCE likely will stick with Atlantic Yards.
Posted by eric at 9:44 AM
March 11, 2009
Forest City in the News: Financial Straits Edition
It looks like Atlantic Yards developer Forest City Enterprises might be in deeper doo-doo than they have been letting on.
Yahoo Finance, The Coming Value Party
By Tim Melvin, RealMoney.com Contributor
Third Avenue, the largest institutional holder of Forest City Enterprises stock (FCE-A), is also buying senior debt.
Because he has a fantastic track record in distressed bonds, I was very interested to see that both Third Avenue Value and the Third Avenue Small Cap Value run by Curtis Jensen were buying distressed credits in companies he believes are 70% to 80% likely to remain performing credits. In addition to buying more shares in long-term holding Forest City Enterprises, the fund purchased the bonds of the company at levels that provided yields to maturity of better than 30%. Forest City has exchange-traded bonds as well that trade under the symbol FCY on the NYSE. These are senior unsecured notes that trade at less than 25% of par, with yields of better than 30%. Whitman has done very well with this type of investment over the years, and if Forest City can survive the recession, these notes are a home run. In a bankruptcy, a quick glance tells me that these may work out to at least the purchase price as well.
To figure out what the heck this means, we contacted blogger Gari N. Corp who explained Third Avenue's hedge (emphasis added):
They're a big holder of FCE stock, but if FCE goes bankrupt then there's a good chance that stockholders get nothing, or almost nothing. That's because in bankruptcy the holders of debt are repaid first. Now, there are different types of debt - the best stuff is the secured debt, say debt that is secured on a piece of real estate (better hope, though, that its value has held up). At the bottom there's convertible or subordinated debt, as well as those bonds you brought to my attention that were "equity-linked".
But senior unsecured bonds give you a pretty good right to be repaid first, so in the event of a bankruptcy you'll get a fair amount of your money back. Well, if the bonds are trading at 25c on the dollar, the market is suggesting that you won't get a huge amount back, but if you're third ave and you bought the bonds at 25c on the dollar and you get back 30c on the dollar in bankruptcy then you've made a 20% profit.
The fact that Third Ave is now buying bonds as well as stock suggests that it has a very real concern that the stock would be wiped out in bankruptcy.
The Cleveland Plain Dealer, Forest City trying to sell stake in 15 properties, newsletter says
By Michelle Jarboe
Could Forest City be so strapped for cash that it is selling the good stuff?
Industry newsletter Real Estate Alert is reporting that Forest City Enterprises Inc. is looking for buyers for 15 properties.
Forest City, based in Cleveland, has been trying to sell properties outright or into joint-venture deals to raise money. The company largely has put new development on hold and is focusing on managing its existing properties and building up some cash. According to the Real Estate Alert report, Forest City is seeking buyers for full or partial stakes in 10 apartment properties, four shopping centers and the office portion of University Park at MIT, a mixed-use development at the Massachusetts Institute of Technology in Cambridge, Mass.
Forest City spokesman Jeff Linton would not comment on the Real Estate Alert article or discuss any specific properties that might or might not be for sale. He said any deals in the works would involve confidentiality agreements, which Forest City will not break.
Real Estate Alert's article did not cite a source.
NoLandGrab: We love how Forest City will not break "confidentiality agreements" concerning their efforts to dump hard assests to raise cash. That's like saying that the company won't break its own gag order signed with property owners who sold under threat of eminent domain.
Yahoo Finance, FCE-A
Forest City closed down for the day at 4.25.
Posted by lumi at 6:52 PM
Forest City in the News
Usually Atlantic Yards developer Forest City Enterprises hammers out these public-private partnership deals in some backroom somewhere, so watchdogs like ourselves are not used to the company's desperate public advances attempting to get back in the game for the Medical Mart deal in Cleveland:
The Cleveland Plain Dealer, Forest City making late bid to salvage medical mart project for Tower City
Executives from Forest City Enterprises are in Chicago today, making what could be their last pitch to build a new medical mart and convention center at the downtown Tower City Center, a site Cuyahoga County commissioners have passed over for the project.
...
[Merchandise Mart Properties Inc.] executives almost immediately shot down Forest City's new plan, calling it a "nonstarter." Nevertheless, MMPI agreed to meet with Forest City this morning. The session is expected to end by early afternoon, an MMPI spokeswoman said.
The Cleveland Plain Dealer, Forest City Enterprises continues to fight for medical mart project
It does not appear Forest City Enterprises gained much ground Tuesday trying to land the medical mart project for its Tower City property.
"There's nothing that jumps out at you and really feels like it's so compelling to move there," said a top official of Merchandise Mart Properties Inc. after a lengthy meeting with Forest City in Chicago on Tuesday.
...
The fight looks to be about over.Mark Falanga, MMPI senior vice president, said by phone after the meeting that he was not immediately convinced that Forest City's construction estimates were valid. Cleveland-based Forest City claims it can build the project on its land for $27 million less than the projected cost on the county's favored site, including estimates for land acquisition.
Falanga said his staffers would review Forest City's numbers, and a final judgement would be made in a few days.
Part of the Forest City plan includes straightening a small section of the riverbank along Tower City property to provide more space for the new complex.
Falanga said a change of that magnitude would cause the U.S. Army Corps of Engineers to get involved, causing delays.
NoLandGrab: Like a creepy ex, Forest City isn't gonna take "no" for an answer and just move on. It's like they really, really need this deal and they are way past caring how it looks.
Posted by lumi at 2:38 AM
March 10, 2009
Forest City and Downtown Fresno
Brian's FresYes Blog
While we here in New York have the opportunity to learn from New London's mistakes, the Fresno City Council could learn from our mistakes. Just ask former Fresno Council member Brain Calhoun, who once supported a big Forest City development project in Fresno's downtown.
I would encourage the Mayor and Council to review the March 7-8 article in the Wall Street Journal, A Hole Grows in Brooklyn (Ms. Vitullo-Martin, the Manhattan Institute), about the proposed 2003 Forest City development project, Atlantic Yards, that was to remake downtown Brooklyn by building expansive residential and retail space, and a new arena that would bring the New Jersey Nets to the borough. Now, more than five years later, "what's been brought to Brooklyn is a very large hole in the ground and a project that is coming to symbolize why large government projects can be riskier than allowing local residents to fix up their own communities." Let Brooklyn's experience be a warning shot across City Hall.
There is no question that Forest City is an experienced developer of government-financed and tax-abated projects. I believe, however, that the City has given them all the exclusive negotiating agreements they need. Let them, if they wish, compete with anyone else interested in improving our downtown.
NoLandGrab: "There is no question that Forest City is an experienced developer of government-financed and tax-abated projects" sounds like a bit of a backhanded compliment.
Posted by eric at 4:24 PM
The New York Times Sells Its HQ, Starts Paying $2 Million a Month in Rent
Media Memo
By Peter Kafka
One media watchdog tries to make the connection between the NY Times Corp's sale of its portion of the building it shares with Forest City Ratner and the stock price of Ratner's parent company, Forest City Enterprises:
More cash to shore up the New York Times Company (NYT): As the Times itself previously predicted, the company has sold off (most of) its portion of its Manhattan headquarters for $225 million.
...
Meanwhile, if you want to see what the market thinks of the deal the Times got, check the stock price of Forest City Ratner (FCE-A), the real estate developer that owns the rest of the building the Times is selling.
NoLandGrab: Those who have been watching FCE drop during the past year will tell ya that without knowing who is buying or dumping, it's hard to peg the stock price to an actual event like the sale of NY Times real estate assets.
That being said, FCE-A's performance reflects overall market malaise, especially in the real estate sector, with some deep concern over highly leveraged long-term projects, like Bruce Ratner's Atlantic Yards, which has a money-hemorrhaging sports team attached to the deal. However, if a media watchdog could actually determine how much of the decline is due to one single event, he or she should be an investment analyst instead.
More at NY Post, TIMES DODGES BULLET WITH COSTLY HQ SALE.
Posted by lumi at 5:59 AM
March 9, 2009
Forest City cuts Mesa del Sol staff in half
New Mexico Business Weekly
While Atlantic Yards developer Forest City Enterprises continues to tell reporters that work has stopped in the Vanderbilt Yards because they have gone as far as they can while lawsuits are still pending, recent layoffs indicate otherwise.
Just last week, half of the staff was laid off for one of the company's award-winning projects, Mesa del Sol, as residential development was once again stalled, due to the economy (not lawsuits).
Mesa del Sol’s staff is being cut in half and its residential development plans have been put on hold indefinitely.
Developer Forest City Covington blamed current economic conditions for the cuts but expressed optimism long term for the 12,000 acre development near Albuquerque’s Sunport International Airport.
The layoffs will reduce Mesa del Sol’s staff from its current 18 to nine over the coming months. It’s the second round of cuts since last November, when Forest City pink slipped the project’s economic development team.
...
“Our plan for Mesa del Sol is that it will be developed over the next 35 to 50 years. We know in the real estate business that there are ups and downs and unfortunately, we are working with a down market.”
Posted by lumi at 5:45 AM
March 5, 2009
Forest City Enterprises eliminates another 100 jobs
The struggle to get its fiscal house in order continues for Atlantic Yards developer Forest City Enterprises; the company announced today that it was cutting another 100 jobs nationwide. This follows a previous round of lay offs back in November 2008, the suspension of dividends in December, and a "greater emphasis on monitoring and managing upcoming maturities."
The Cleveland Plain Dealer, Forest City cuts 100 jobs, 50 of them in Cleveland area
Forest City Enterprises Inc. (NYSE: FCE-A) cut 100 jobs Thursday, 50 of them in the Cleveland area.
The real estate company, based in downtown Cleveland, is trying to reduce costs amid an economic crisis that has been particularly cruel to real estate. This is the second round of job cuts in recent months for Forest City, which has tabled most new development in favor of managing its properties and reducing its debts during the downturn.
...
"We anticipate that the need for across-the-board job reduction is now behind us," [spokesman Jeff Linton] said. "It may be necessary to have targeted reductions in the future, but it's not possible to predict at this point."
Crain's Cleveland Business, Forest City Enterprises eliminating another 100 jobs
“This is part of our ongoing cost-reduction efforts, and a difficult but necessary step as we bring expenses into line with our near-term outlook,” Mr. Linton said.
The real estate giant currently employs about 800 people in Northeast Ohio, most at its Terminal Tower headquarters, Mr. Linton said. Total employment nationally remains about 3,000.
Posted by lumi at 7:58 PM
March 4, 2009
Forest City's business, residential tenants could use some wiggle room
The Cleveland Plain Dealer
"Letters Unlimited"
One customer and former Forest City Enterprises tenant wonders why Cleveland's Medical Mart project should be built at Tower City, when outward signs indicate that the development company can't get its current business right:
I see that Forest City still won't give up the ghost or its executives' hopes to get their hands on a multimillion-dollar project that is supposed to benefit Cleveland and its citizens ("Forest City pitches cheaper mart project," Feb. 27). Please explain to me how this company plans to do this when it can't even properly run the properties the Avenue at Tower City (Forest City's proposed site for the medical mart).
I have been going to Tower City for almost two years, five days a week on my lunch break, and it seems that every few weeks or so another one of the stores that I enjoyed frequenting is gone. The latest casualty is GoToys, which claimed the same reason that I have heard from others that have left: The rent is out of sight and the company will not negotiate.
With the economy in the tank, one would think that corporate America would wise up and learn that the small business owner is the backbone of this country. With only a couple of stores left for me to frequent, my need to go to Tower City is shrinking. There are any number of places to eat downtown besides the food court. Additionally, I've lived in Forest City-managed apartments. Customer service stunk there, too.
Wise up, Forest City.
Posted by lumi at 4:13 AM
March 2, 2009
Cleveland city councilman warns Medical Mart project is on "thin ice"
wkyc.com
Forest City Enterprises had a fit when they lost the opportunity to sell a portion of the company's Tower City site for Cleveland's new MedicalMart-and-convention-center plan. All the belly-aching earned Forest City a chance to redo the company's pitch, though a local city councilman warns that time is running out, since other cities are coming up with competing plans.
In January, Cuyahoga County commissioners announced that the current convention center downtown would be the site for the medical mart and new convention center.
But last month, developers with Forest City came up with a different plan to build the medical mart behind Tower City, one which they claim would cost millions less than building on the current convention center site.
Forest City representatives will travel to Chicago next week to present their plans to Merchandise Mart officals.
...
But Polensek feels the current convention center site is the best option for the medical mart. The findings of an engineering study on whether the current convention center foundation can support the project should be released in a few weeks.
NoLandGrab: This reminds us of a famous Atlantic Yards do-over, way back in August 2005, when Forest City Ratner's lowball bid earned the company the right to exclusively negotiate the terms of the purchase of the Vanderbilt Railyard.
It will be interesting to see how this one turns out. Forest City Enterprises is very eager to get this deal done in light of the company's repeated reminders to investors and the press that it is "proactively managing [its] debt maturities."
Posted by lumi at 4:48 AM
February 17, 2009
PRESS RELEASE: Forest City Secures Refinancing on Key Loan for Brooklyn Project
Forest City Enterprises continues to try to reassure investors by issuing a press release every time they secure financing. This week the company ducked a major blow by ponying up $15 million to Gramercy Capital in exchange for a two-year extension on a bridge loan for Atlantic Yards.
From PR Newswire:
CLEVELAND, Feb. 16 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA) (NYSE: FCEB) today announced that a subsidiary has secured a $161.9 million refinancing from Gramercy Capital Corp. and certain co-lenders on a key loan associated with the Company's Atlantic Yards project in Brooklyn, New York.
The original loan covered land acquisition costs at the project site and was set to come due this month. The refinancing will be due in February, 2011.
"This is a great outcome, especially given current market conditions, and I applaud the work of our New York team in making this happen," said Charles A. Ratner, Forest City Enterprises president and chief executive officer. "This is a key step in our strategy of proactively managing our debt maturities. By working closely with Gramercy Capital Corp to secure this refinancing, we have put Atlantic Yards in a position to achieve the vision of economic revitalization, job creation and affordable housing for the future of Brooklyn."
Joanne Minieri, president and chief operating officer of Forest City Ratner Companies, the Brooklyn-based subsidiary of Forest City Enterprises, said, "The Atlantic Yards project has never been more important for Brooklyn. We appreciate the vote of confidence this refinancing represents, and we are as committed as ever to moving forward with this critical project."
This press release seems to have been issued due to inquiries from reporter Michelle Jarboe of The Cleveland Plain Dealer, who posted two items on the deal (first reported on the NY Times City Room blog), one before the press release was issued and one afterward.
Posted by lumi at 4:44 AM
February 16, 2009
CEOspeak
After last week's announcement that Gramercy Capital agreed to a $15 million repayment and two-year extension on its $177 million loan, FCE's CEO released this statement, which was added to Charles Bagli's story on the NY Times City Room blog:
“This is a great outcome given current market conditions, and I applaud the work of our New York team in making this happen,” said Charles A. Ratner, Forest City Enterprises president and chief executive officer. “This is a key step in our strategy of proactively managing our debt maturities. By working closely with Gramercy to secure this extension, we have put Atlantic Yards in a position to achieve the vision of economic revitalization, job creation and affordable housing for the future of Brooklyn.” [Emphasis added.]
NoLandGrab: This is financialspeak for, "Even though we assured investors that our development projects are highly government-subsidized, we still totally managed to screw up our balance sheet. However, we are trying to restructure our debt in lieu of declaring bankruptcy."
Posted by lumi at 5:06 AM
Gramercy Capital's Further Downside Risks
Seeking Alpha
Though Gramercy Capital's extension of its $177 million loan to Forest City Ratner was billed in the press as a reprieve for the project, maybe, just maybe, the lender's finances are nearly as screwed up as Ratner's and it didn't have much choice.
Gramercy Capital (GKK) is a REIT that specializes in mortgage and real estate loans. A slew of REITs have been reporting in the last two weeks, and several have mentioned outstanding loans and joint ventures with Gramercy. Gramercy has given some of them extensions on their loans, but it doesn't appear to be from a position of strength.
Like Forest City, Gramercy's shares are in the toilet too:
Shares have been in a downtrend since May 2008 when they were still trading around $20. GKK closed at $1.05 on Friday; there could be more downside to go.
In the meantime, GKK investors are writing down their stakes. Seeking Alpha listens in on a couple conference calls where GKK is cast as "a lender in trouble."
Posted by lumi at 4:46 AM
February 13, 2009
Forest City in the News
The Cleveland Plain Dealer, Forest City makes another bid to bring medical mart to Tower City
Forest City Enterprises used a public forum to try to reverse a backroom deal that the company lost out on.
Forest City Enterprises used a public forum this afternoon in a bid to revive the chances of landing the proposed convention center/medical mart to property it owns at Tower City.
David LaRue, president of the Forest City commercial group, pushed officials of Merchandise Mart Properties Inc. -- developers of the project -- to look again at whether the complex can be built at Tower City.
LaRue said Forest City believes the project can be built there for around the $425 million projection for construction at the site of Cleveland's current convention center -- the favored location of MMPI.
PR Newswire, Forest City Statement in Response to MMPI Presentations on Convention Center/Medical Mart Location Recommendations
NoLandGrab: Yes, we noticed that Forest City Enterprises (FCE) is sounding and acting a little desperate too.
If you keep in mind that FCE is strapped for cash, then recent public statements of outrage made by company officials after losing the bid and yesterday's effort to get back in the game highlight the importance of the Medical Mart deal to the company's financial outlook.
Posted by lumi at 4:23 AM
February 10, 2009
Forest City in the News
The Cleveland Plain Dealer, Build Cleveland's med mart where the medicine is - Jim Strang
More on the convoluted tale of the Cleveland Medical Mart project and Forest City Enterprises's enduring wish to get in on the action.
One Jumbo is Forest City's riverside property. Too small and ill-shaped for much of anything useful, Forest City's site offers its one real attribute - relative convenience to the company's Tower City and its Rapid and bus connections - as sufficient to offset its costly limitations. Hey, it worked with the Carl B. Stokes Federal Court House. Why not try for another drink from that publicly funded fountain of green?
IndianaGazette.com, MAYOR AND DEVELOPER PUSH TO REMAKE LAS VEGAS'S DOWNTOWN
The Indiana Gazette ran the Times story on Forest City Enterprises's Las Vegas City Hall project.
Crib Notes, More on Forest City projects in Las Vegas
The Cleveland Plain Dealer's real estate blog is keeping tabs on Forest City Enterprises coverage in Las Vegas.
Posted by lumi at 5:37 AM
Bridge to Nowhere
 |
This shot of the half-demolished Carlton Avenue Bridge was just uploaded by "Evil Scientist" in the flickr Atlantic Yards Photo Pool.
Forest City Ratner stopped work over the Vanderbilt railyards, claiming that the company has done just about all it could do while the lawsuits are pending. Considering that this bridge has to be demolished and rebuilt, one of these days, it makes us wonder if the company isn't actually dealing with something like a really, really bad cash-flow problem instead.
Posted by lumi at 5:28 AM
February 9, 2009
With Credit Frozen, Developers Downshift
The New York Times
by Diana Marszalek
More woes for Forest City, this time in New York's Westchester County.
Today, however, such visions of Westchester’s future do not look as rosy, primarily because of the financial meltdown that, in some cases, has brought the business of construction to a halt, developers and local leaders said.
“It’s a mess,” said Geoffrey Thompson, of the public relations firm Thompson & Bender and a spokesman for Cappelli Enterprises, Core Plus Properties and other developers. “No one saw anything of this magnitude coming.”
With banks not lending money readily, retailers facing dismal sales and the housing market woefully hurt, now is hardly prime time for investors to spend millions or billions creating a new vision of Westchester, developers said.
...The developer Forest City Ratner has asked New Rochelle to formally delay approval of its proposed $450 million Echo Bay waterfront revitalization project. That means the mixed-use project will most likely break ground in early 2011 rather than 2010, officials said.
We're pretty sure Echo Bay is a Forest City Residential project, which would but it under the auspices of parent company Forest City Enterprises. However, Forest City Ratner has its own headaches in Westchester County.
Even projects already under construction — Forest City Ratner’s $600 million Ridge Hill development in Yonkers, for example, with shopping, entertainment, office and hotel space — are facing less certain futures than they were a year ago, real estate analysts said.
With the retail outlook bleak, many stores are more apt this year to scale back or close than expand, meaning not only will new space be hard to fill, but there may also be new vacancies in existing space as well, real estate developers said.
Businesses that do move into new space will most likely pay rents far lower than originally expected, so developers, municipalities and investors may not recoup their investments as planned, some developers said.
Posted by eric at 10:58 AM
It's the Mall or not at all for Med Mart, convention center
Crain's Cleveland Business
Looks like Medical Mart developer Merchandise Mart Properties Inc. has seen Cleveland Mayor Frank Jackson's bet, and raised him.
Jackson, a pawn supporter of Cleveland bigwigs Forest City Enterprises, said Friday that the County's commissioners would pick the Medical Mart site if the preferred Mall site — not owned by Forest City, which is promoting its own Tower City location — wouldn't fly.
MMPI now says there're only two choices — the Mall or none at all.
There's no backup location for the proposed convention center and medical merchandise mart that Cuyahoga County commissioners plan to construct on the Mall in downtown Cleveland. If the project can't be built at the Mall site at a cost that can be covered by the tax dollars dedicated to it, the entire endeavor will be scrapped.
That message is what Merchandise Mart Properties Inc., the developer entrusted with creating the project, will tell the people of Northeast Ohio this Thursday, Feb. 12, at two meetings, one with Cleveland City Council and one planned for the public.
Posted by eric at 10:28 AM
Complicated deal, powerful partner
Forest City Enterprises is accomplished, but hit by torrent of bad news
Las Vegas Sun
by Sam Skolnik
Forest City's bid to build a new city hall in Las Vegas provides a jumping-off point for an exploration of the company's mastery of the public-subsidy game.
As the city hall project moves forward, Forest City’s record — both positive and negative — is coming into better focus.
Though the developer is rightly known for building high-quality projects, observers say, it also routinely and effectively uses the strength of its name to gain huge subsidies and tax breaks from local governments.
...One of the company’s ongoing projects in Albuquerque, called Mesa del Sol, may hold lessons for Las Vegas. The project ultimately will comprise a 12,900-acre tract of land, four town centers and 100,000 residents.
Forest City has been extolled for concentrating on bringing a wide array of businesses to the area.
...And yet there has been a serious downside to dealing with Forest City, he said — its bulldozer approach to taxpayer financing. Forest City demanded it, and got it. The company pulled together a powerful team of lobbyists to get a new tax increment law passed, which allows future gains in tax revenues to finance the improvements that will create those gains.
...By winning approval to float $500 million in infrastructure bonds — backed by the revenue from significant shares of future state and local taxes — Forest City will make hundreds of millions of dollars over a 25-year period, Nims said.
Forest City lobbyists “rewrote the law to favor themselves entirely,” Nims said. “We’re now struggling to close some loopholes and reform the legislation.”
(That Forest City subsidiary, called Forest City Covington, plus its officials and members of their families, donated almost $300,000 to New Mexico Gov. Richardson’s campaign committees over a six-year period, according to news reports. Richardson later supported the Forest City bond deal.)
NoLandGrab: The Forest City game plan will come as no surprise to Brooklynites, who are watching now as the company tries to step up its game to the Federal subsidy level.
Forest City watchers can also be sure that the utter complexity of the proposed Las Vegas deal — good luck trying to figure it out — is designed to benefit the developer at the expense of the city's taxpayers.
Posted by eric at 10:01 AM
Forest City in the News
The NY Times, Roll of the Dice on Las Vegas’s Shabby Downtown
A "complicated land swap and a lease-back arrangement" with Forest City Enterprises is at the heart of Las Vegas Mayor Oscar B. Goodman's downtown renewal plan.
The project would include a new city hall (never mind that the existing one, built in 1973, has an addition only six years old), a casino resort (the first in downtown in some three decades) and office, residential and commercial space (because, the developers of this project assert, the eventual economic recovery will create demand for it).
The plan includes a complicated land swap and a lease-back arrangement — “a college football parlay card, in which everything has to fall into place,” The Las Vegas Review-Journal said in an editorial. For taxpayers, the bottom line could mean borrowing $150 million to $267 million, with tax revenue from new development paying it back over time.
...
Under the plan, the development group LiveWork Las Vegas/Forest City would build the new city hall at First Street and Clark Avenue, lease it back to the city and swap the land underneath for a 6.4-acre property at Union Park, a large mixed-use complex being developed with another partner that will include a concert hall, space for medical research and other components. There, the development group would build a 47-story, 1,000-room high-end casino hotel.The land under the existing city hall could be paired with an adjacent lot for 20 acres of developable space, perhaps for an arena to lure a professional sports team, which the mayor has long sought.
NoLandGrab: We're not sure if the reporter or editor discussed adding a disclosure to the article, but it should be noted that Forest City Enterprises's local subsidary co-owns the Times Tower with the NY Times Company.
The Cleveland Plain Dealer, Med mart-convention site decision up to elected officials, says Cleveland Mayor Frank Jackson
After Forest City Enterprises's reversal of fortune with the Medical Mart project in Cleveland and an unofficial assurance by the developer towards another site candidate, the Mayor stepped up to the podium to calm things down:
Mayor Frank Jackson said Friday that the three Cuyahoga County commissioners - and not private developer MMPI - will pick the site for a new convention center and medical mart if the preferred site on the mall does not work.
...
"We don't know what Mr. Falanga of MMPI said to Mr. Wolstein about his site," Jackson said in a news release. "But no private developer - whether it's MMPI, Forest City or Mr. Wolstein - will determine which site is chosen."
Posted by lumi at 4:57 AM
February 7, 2009
Be skeptical of Forest City, New Yorkers warn Las Vegas
Atlantic Yards Report
KNPR, Nevada Public Radio, has been reporting on a proposal by Las Vegas Mayor Oscar Goodman to build a new downtown Las Vegas City Hall in partnership with developer Forest City Enterprises, a proposal opposed by the 60,000-member Culinary Union.And while Forest City has been unwilling to send a rep to be interviewed, on January 30 the program focused on the developer's project in Fresno, CA, and yesterday on Atlantic Yards.
The takeaway for Las Vegans from yesterday's show was to be skeptical of the developer and to take any announced plans with a grain of salt.
But the takeaway for Brooklynites probably came from Matthew Schuerman of WNYC, who warned that "the bond market can turn around in a year," which means that, should lawsuits be resolved in the state's favor--and that's more likely than not--the arena might go ahead. In other words, AY is hardly dead.
Posted by amy at 12:28 PM
Forest City nixes community input
YourNabe.com
Stephen Witt
Developer Forest City Ratner Companies has nixed several interim ideas that a community organization has suggested before the Atlantic Yards project gets underway.In a letter sent to Assemblymember James Brennan, the company responded to several interim measures for the 22-acre arena/housing/commercial project that the organization BrooklynSpeaks suggested in a letter to Gov. David Paterson.
The recommendations include returning the Carlton Avenue Bridge to service, creating interim public space in sites already demolished, and utilizing vacated buildings the company owns for community use or affordable housing until construction starts on those sites.
“The demolition and reconstruction of the Carlton Avenue Bridge is being coordinated with the construction of the new LIRR yard,” wrote FCRC Executive Vice President Maryanne Gilmartin. “Re-opening it is not practical or feasible, given the coordination issues, expense, and the fact that it will be put out of service again as soon as construction starts, which we expect to occur in mid-2009.”
It seems a tad odd that "a letter to Gov. David Paterson" was answered by Forest City Ratner. Oh, and whoopsie about that "shovel-ready" comment:
Separately, ESDC Communications director Warner Johnston backtracked on the agency’s comments made last week to this paper that the project would not be eligible for federal stimulus money because it wasn’t “shovel ready.”“I am afraid that my office put out some inaccurate information regarding Atlantic Yards and whether it was shovel-ready. I take full responsibility and apologize,” Johnston wrote in an email.
“As we have stated in the past, the temporary suspension of work at Atlantic Yards is due to pending litigation. Once it has been resolved, work will continue. Stating that this site is not “shovel-ready” was inaccurate,” he added.
Posted by amy at 12:13 PM
Union looking past the paycheck
Las Vegas Sun
Michael Mishak
The Culinary Union in Las Vegas has the good sense to not roll over and play dead by signing a weak and unenforceable community benefits agreement:
The union’s larger proposal is that all future jobs — union and nonunion — be subject to living wages and include health insurance. The union says it’s a fair exchange for the subsidies a private developer will receive.(The redevelopment deal calls for Las Vegas and Forest City Enterprises, the primary developer in the disputed downtown plan, to swap land and for Forest City to receive an annual tax subsidy valued at $3 million to $4 million.)
Posted by amy at 11:27 AM
February 6, 2009
You Read Us! You Really Read Us!
Seems like someone at Forest City Ratner is a reader of NoLandGrab, since when we checked a few minutes ago, the Atlantic Yards web site had been updated to show that Forest City owns the Queens Place Mall, not MaceRich's Queens Center Mall — an error that we pointed out this morning.
Yoohoo, Barclays, anybody out there?
Posted by eric at 5:50 PM
Atlantic Yards and More Cowboy Poetry
Heh, heh... for a second we got excited by the prospect of hearing some cowboy poetry about Atlantic Yards.
Actually, Atlantic Yards is being featured on Nevada Public Radio as a part of a series examining developer Forest City Enterprises, which is in the center of a controversy involving a landswap deal, a casino and a new City Hall:
02/06/09: Forest City is pushing to build a new Las Vegas City Hall, but major Forest City projects have stalled elsewhere in the country. We hear what's happened with the company's multibillion-dollar plans in Brooklyn.
The report is to feature WNYC reporter Matthew Schuerman, New York Magazine political reporter Chris Smith and Develop Don't Destroy Brooklyn spokesperson and lead eminent domain plaintiff Dan Goldstein.
[Cowboy poetry is a separate feature later in the broadcast.]
Posted by lumi at 5:54 AM
Forest City Clarifies Waiver Related to Corporate Line of Credit
PR Newswire
CLEVELAND, Feb. 5 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA; FCEB) today confirmed that it has received a waiver from its 14-member bank group related to the Company's corporate line of credit. The need for the waiver was triggered by an unintentional non-compliance with one of the non-financial covenants of the line of credit which occurred when the Company purchased $15 million face value of its Puttable Equity-Linked Senior Notes at a cost of approximately $10.6 million.
Commenting on the events leading to the waiver, Forest City president and chief executive officer Charles A. Ratner said, "We saw the opportunity to purchase these notes at a discount as a prudent business decision, and we believed the purchase, which occurred during the Company's fiscal 2008 third quarter, was in compliance with our credit agreement. In subsequent review with our lenders after the close of the third quarter, it was determined that the transaction was not in compliance with one of the non-financial covenants of the line. As a result, we immediately entered into discussions to obtain a waiver to allow the transaction, and reached agreement in less than one week with members of the group.
"It is gratifying that our lenders understood that the noncompliance was unintentional and responded with good-faith discussions that allowed us to promptly secure the needed waiver," Ratner added.
From Reuters, via Forbes.com, BRIEF-Forest City gets waiver from bank group
Posted by lumi at 5:32 AM
Amusing Ratner pr humdinger
Recently something landed in our box that basically went this way: Whoa, Ratner is pissing off the Chairman of the Metropolitan Transportation Authority H. Dale Hemmerdinger!
On Tuesday, The NY Times reported that lenders are foreclosing on Hemmerdinger's Queens mall.
David A. Rosenberg, an executive vice president of Robert K. Futterman, a retail leasing firm, said the mall was hurt by competition from an expanded Queens Center Mall and from the established shopping corridor on Austin Street in Forest Hills.
The tipster informed us that the Queens Center Mall is owned by Atlantic Yards developer Forest City Ratner, which is currently trying to renegotiate terms for the development rights over the Vanderbilt Railyards with the MTA.
A quick check in our own archives indicated that Bruce Ratner pissed off the community with garish signage on his Queens Place Mall.
Queens Center Mall vs. its smaller neighbor the Queens Place Mall — how did the tipster get it wrong? Apparently from Ratner's own AtlanticYards.com web site. [The Barclays Center website followed suit.]
You can hardly blame the public's confusion, if Ratner's own pr team can't get it right.
Posted by lumi at 4:59 AM
February 5, 2009
Forest City in the News
Cleveland Plain Dealer, Scott Wolstein site on Flats east bank is second choice for medical mart
The news is getting worse for Forest City Enterprises in its home town of Cleveland, where the site it proposed for the city's big new Medical Mart project has slipped to third place.
Needless to say, Forest City execs are not used to not getting their way.
Forest City Enterprises spokesman Jeff Linton said the Cleveland company is disgusted to learn it is now, at best, a third option.
Said Linton: "It's a very strange process indeed by which our site goes from the first-place site based on a very detailed analysis that the [Greater Cleveland Partnership] did, to the second-place site based on MMPI's analysis that no one has seen, to third place based on one meeting in Chicago - and all without one single substantive discussion with us about the merits of our site and the opportunities for cost savings."
NoLandGrab: Atlantic Yards watchers will get a kick out of Forest City's indignation over backroom deals and missed "opportunities for cost savings," since Extell Development outbid Forest City Ratner 3-to-1 for Brooklyn's Vanderbilt Railyard in 2005, only to have the Metropolitan Transportation Authority decide to "negotiate" exclusively with Forest City — a process that netted a deal still worth $50 million less than Extell's original bid.
Brewed Fresh Daily, News Flash: Forest City “disgusted” by “strange” process
Apparently, not everyone in Cleveland OH shares the developer's "disgust":
Au contraire, mon ami, it looks like people are disgusted instead with your Forest City.
Crib Notes [Cleveland Plain Dealer real estate blog], Forest City says Las Vegas casino is several years off
Recent media reports that Forest City Enterprises Inc. plans to build a hotel-casino project in Las Vegas aren't inaccurate -- but they're somewhat premature, a spokesman says.
The real estate company, based in Cleveland, has shelved most development in favor of managing its existing properties during a nasty commercial real estate slump. That's why it seemed somewhat surprising when Las Vegas media outlets recently reported that Forest City was pitching a 47-story hotel-casino project on a piece of land in Union Park.
...Forest City bought land in downtown Las Vegas in 2007 and signed a development agreement to build a new Las Vegas city hall on part of the property. The company expects to start construction this year on the project, which is publicly funded -- and therefore somewhat easier to launch right now than a development that relies on bank financing or other private sources.
NoLandGrab: "Easier to launch" if not for Las Vegas's most powerful union, which is pulling out all the stops to stop the building of an expensive new city hall.
Posted by eric at 5:33 PM
February 1, 2009
"Happy people pictures"--the secret to a good Forest City Ratner web site?
Atlantic Yards Report
If anyone's looking for a clue to Forest City Ratner's modus operandi on the web, check out this unfinished page from the web site for the Ridge Hill project in Westchester.Besides an effort to be more conversational, the key is apparently "happy people pictures." (Click to enlarge.) It's certainly part of the Atlantic Yards campaign.
NoLandGrab: If FCR needs some happy people suggestions they should look no further than last year's Brooklyn Day event!
Posted by amy at 10:00 AM
January 30, 2009
Reports of Atlantic Yards' Death Have Been Greatly Exaggerated - Reprint of Develop Don't Destroy Brooklyn Newsletter
Yonkers Tribune
Folks keeping tabs on Forest City Ratner overdevelopment in Yonkers like to keep tabs on what their favorite overdeveloper is up to in Brooklyn. Yesterday the Trib published the entire text of Develop Don't Destroy Brooklyn's (DDDB) latest newsletter.
For those of you who aren't on DDDB's distribution list, click here.
Posted by lumi at 4:57 AM
January 28, 2009
Cleveland self-immolation reaches new irony - Forest City! demands transparency
Blogger Interrupted
Controversial Ohio blogger Tim Russo finds Forest City's outrage outrageous.
Just when you think Cleveland can’t caricature itself any further, a shocker! Filthy rich developer already obscenely engorged with taxpayer riches going back decades, largely because of closed, opaque non-transparent back room deal making, finally loses a back room deal. And NOW they want transparency.
NoLandGrab: Keep in mind that Forest City Enterprises is to Cleveland what Forest City Ratner is to Brooklyn, only on steroids.
Posted by eric at 10:24 AM
Forest City Enterprises calls for public review of convention center site decision
Cleveland Plain Dealer
by Jim Nichols
The ultimate beneficiary of government back-room deals doesn't like the taste of its own medicine.
Executives from Forest City Enterprises called Tuesday for a public review of the Cuyahoga County commissioners' decision to spurn their firm's proposed site for a downtown convention center in favor of building where the old one sits, under and around Mall B.
"As long as this is done in an open process, and a process that allows the light of day in a decision of this great a magnitude, we'll support it, for the good of the community," David LaRue, a top Forest City executive, said in an interview.
NoLandGrab: Financially shaky Forest City was obviously counting on the revenue the Medical Mart project would bring their way — and on their sway with Cleveland's elected officials to carry the day.
Wonder if their new-found love of openness and transparency will lead them to demand an investigation into how high-bidder Extell lost out on the MTA's Vanderbilt Railyard?
Oh, and be sure to read the comments posted on the Plain Dealer web site.
Posted by eric at 9:40 AM
January 27, 2009
Mall Site Chosen For Medical Mart And Convention Center
WCPN Cleveland Public Radio
In a blow to developer Forest City Enterprises, Cuyahoga County's commissioners voted unanimously to build Cleveland's planned Medical Mart on the site of the city's Convention Center — rather than the Tower City site owned by Forest City.
The mall is the site preferred by Merchandise Mart Properties Inc. The Chicago firm is the county's partner in developing and operating the medical mart and convention center. The commissioners made their decision after several hours of closed door discussion which irritated representatives of Forest City Enterprises. Forest City had been trying to sell the commissioners on another site and spokesman Jeff Linton told the Plain Dealer he was "stunned" and dismayed that the commissioners eliminated consideration of the Tower City site with so little public discussion.
NoLandGrab: No wonder Forest City is irritated — they're used to being behind the closed door, inside the back room. Never mind that the Commissioners found that the Tower City site would cost Cleveland $100 million more than the site they selected.
Don't be surprised if opponents of the company's Atlantic Yards project experience a little schadenfreude when hearing that Forest City was "dismayed" that there was "so little public discussion." Will this outcome usher in a new era of openness at Forest City? We already know how committed they are to sharing information.
Posted by eric at 12:17 PM
January 26, 2009
Priceless Video: Brooklyn Goes to Cleveland
This is an amazingly amusing short film from the 1950s that’s about Cleveland from the perspective of Brooklyn. Priceless. Props to E.C. Stephens for coming across this. Seriously, if you want to chuckle, watch this.
Prescience:
"Because of a few trees, they call themselves da Forest City. That could be right, from what I see of it, they're still not outta the woods."
Posted by lumi at 7:18 PM
January 25, 2009
Outward Bound: Forest City Ratner also gives to NY Times publisher Arthur Sulzberger's favorite charity
Atlantic Yards Report
Henry Ward Beecher said "Every charitable act is a stepping stone towards heaven." Not wanting to wait, Bruce Ratner performs charity that benefits him in the here and now by many millions of dollars. Please read this blog entry to see just how it's done.
Let's take a look at New York City Outward Bound, which lists Forest City Ratner among those supporters contributing $50,000-$99,999. This comes from the company, not the foundation.
There's an interesting potential synergy; the contributors at that level also include The New York Times Company and publisher Arthur Sulzberger, Jr., who is on the Outward Bound board.
...
We can't be sure why Bruce Ratner gave--maybe Outward Bound holds a special place in his life, too--but it can't hurt relations with New York City's most powerful publisher, whose opinions are reflected in the Times's editorials (and silences).
Posted by steve at 7:45 AM
January 23, 2009
Atlantic Terminal Tower
Brit in Brooklyn posted this photo of Forest City Ratner's Atlantic Terminal Tower (located across the street from the developer's Atlantic Yards project), along with this debatable description from the architect.
"The tower design addresses three primary relationships: the retail base, the adjacent Williamsburg Bank Tower, and the surrounding residential neighborhood." — From Swanke Hayden Connell Architects
Posted by lumi at 5:22 AM
The NY Times Co. to sell portion of building co-owned with Forest City Ratner
Bruce Ratner is about to get a new business partner in the Times Tower:
The Wall St. Journal, Times Co. Nears Deal On Building
New York Times Co. is nearing a deal to sell a portion of its Midtown Manhattan headquarters in the latest of a string of recent efforts to reduce its debt load.
The deal under discussion is a sale-leaseback transaction in which Times Co. would sell the 19 floors it occupies at its 52-story headquarters to W.P. Carey & Co., an investment-management company, a person familiar with the talks said. Times Co. would continue to occupy and manage the space and have the right to buy it back in 10 years when its lease expires. Times Co. owns an additional six floors that it leases to other tenants; those floors aren't part of the deal.
The building, designed by the architect Renzo Piano, was completed in 2007. Times Co. owns 58% of the tower, and the developer Forest City Ratner owns the rest.
The NY Times, Times Co. Is in Talks to Sell Part of Building
A spokeswoman for the Times Company, Catherine J. Mathis, declined to say how much W. P. Carey would pay for the space, what it would cost to repurchase it or what the rent would be. The Times Company previously said that it was pursuing a sale-leaseback arrangement for up to $225 million and would use the proceeds to repay some of thecompany’s long-term debt.
...
The Times Company owns 58 percent of the 1.5-million-square-foot tower. The developer Forest City Ratner owns the rest of the building. Forest City’s portion will not be included in the sale.
Bloomberg.com, New York Times in Talks to Sell Part of Manhattan Headquarters
The stock fell 42 cents, or 7 percent, to $5.58 yesterday and is down almost 90 percent from a high of $52.79 in June 2002. New York Times has been seeking to sell assets, trim staff and increase revenue through front-page advertisements.
The publisher is also looking for a buyer for its 17.5 percent stake in the Boston Red Sox baseball team, a person familiar with the talks said this month.
Reuters, NY Times in building sale talks with W.P. Carey: report
The building was completed in 2007.
Earlier this month, the company agreed to a pricey $250 million loan from Mexican billionaire Carlos Slim giving the Times extra time to sell assets and improve its business.
Posted by lumi at 4:44 AM
January 22, 2009
Culinary to take beef with city to voters
Halting city hall plan, curbing redevelopment spending are union’s aims
Las Vegas Sun
by Joe Schoenmann, Sam Skolnik
A union fighting Forest CIty instead of providing it with political cover? Las Vegas really is a fantasyland.
Culinary Union officials say they will file two petitions today with at least twice as many signatures as necessary to force June 2 ballot questions aimed at not only stopping Las Vegas from building a new city hall but limiting its options for spending redevelopment money.
...[Culinary Union Political Director Pilar] Weiss said the union’s hand was forced by the city’s push — during a recession and at a time when government services to the public are being slashed — to build a $150 million city hall, which would require the city to raise $267 million through public bonds.
...The city hall financing hinges on an agreement with developer Forest City Enterprises, which would build and develop the 303,000-square-foot building at First Street and Clark Avenue. After construction, the city would lease the building for up to 30 years.
The city intends to sell bonds to finance construction. After finishing the building, Forest City would collect lease payments from the city, which it would use to pay off those bonds.
The deal also includes a one-time payment to Forest City of $7.5 million, equal to 5 percent of the building’s expected construction cost.
But a multimillion-dollar land swap is key to the deal. In exchange for giving the city a block upon which to build city hall, Forest City would get a plot of land in the highly touted Union Park development. The developer wants to build a casino on that plot.
NoLandGrab: Could this deal be more convoluted? It sounds to us like Forest City is swapping the land under the would-be new City Hall for other land owned by the City of Las Vegas, which will sell bonds to pay for construction and then lease the building from Forest City, which will use those lease payments to make payments in lieu of taxes to pay off the bonds. Oh, and the city will toss in a little cash, too.
One thing is simpler, though — by constructing a government building, Forest City doesn't have to go through the motions of trying to look like it's seeking commercial tenants before the local government becomes the biggest tenant in the building, as was the case with Forest City Ratner's MetroTech complex in Brooklyn.
Posted by eric at 11:41 AM
January 20, 2009
Atlantic Center To Lose Major Tenant
Brownstoner
After sixty years in business, consumer electronics retailer Circuit City announced on Saturday that its attempts to find a buyer had failed and that it would close all of its 567 stores as part of the company's liquidation. One of those stores happens to be in the Atlantic Center, Forest City's mall overlooking the site of its proposed Atlantic Yards project. The Atlantic Center store is on the second floor of the mall and won't be easy to fill in this environment.
NoLandGrab: The State of NY is already the Atlantic Center Mall's largest tenant; maybe we can move in a few more State agencies to bail out Bruce Ratner's flailing mall.
Posted by lumi at 4:52 AM
January 19, 2009
Forest City in the News
Crain's Cleveland Business, Parmatown retailers shelve rumors of mall shutdown
With news reports that the owner of Beachwood Place, Northeast Ohio's most upscale mall, is flirting with bankruptcy as it struggles with loan issues, the rumor mill in more modest corners such as Parma is that Parmatown will lose its anchors and be demolished. In Elyria, the talk is that Midway Mall will be shut and sold to the Cleveland Clinic.
Both Parmatown and Midway management say the chatter is not accurate. However, a wave of store closings by retailers amid a decline in consumer spending means mall managers and others spend a lot of time quelling rumors while shopkeepers face the unenviable task of trying to sell in such an environment.
Parma Mayor Dean DiPiero said he has heard juicier, but even more wrong-headed, rumors about Parmatown being torn down for a Kalahari-style water park, a casino or even public housing.
“It's not true,” the mayor said. “I talk with them weekly. Retail is struggling everywhere. Sure, Parmatown has lost stores. But it is continuing to chug along.”
A casino or government-subsidized housing? In a mall?
Part of the strategy at Parmatown is to install other uses on the grounds, so it now operates a community conference center and houses the city of Parma's recreation department, a congressional office of U.S. Rep. Dennis Kucinich, D-Cleveland, and the Parma Chamber of Commerce. The mall underwent a $12 million renovation in 2001.
Government offices in a mall? Where have we heard that before?
Parmatown is owned by Parmatown LLC, which is controlled by RMS Enterprises, a venture formed by the founding Ratner, Miller and Shafran families of Forest City Enterprises Inc.
Ah, now it all becomes clear. Forest City is no stranger to casino development, and New York State has helped out cousin Bruce by locating a large Department of Motor Vehicles office in the developer's Atlantic Center Mall.
Cleveland Plain Dealer, Convention expert Bruce Harris supports Tower City medical mart site
One of the most influential figures in convention and conference booking says Cleveland could wreck its future as a meeting place if Cuyahoga County commissioners pick the existing Cleveland Convention Center as the site for a replacement facility.
The other site under consideration -- a riverfront locale behind Tower City Center -- holds every make-or-break advantage, barring some fatal, as-yet-unrevealed flaw, said Bruce Harris.
...Harris insisted he has no ties to principals at Forest City Enterprises, which owns the Tower City site and wants $40 million for it.
Posted by eric at 4:30 PM
January 16, 2009
Circuit City Sets Deal on Liquidation
AP via NYTimes.com
Looks like there'll soon be room for another New York State or City agency in Bruce Ratner's Atlantic Center Mall.
Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, reached an agreement with liquidators on Friday to sell the merchandise in its 567 U.S. stores after failing to find a buyer or a refinancing deal.
NoLandGrab: The New York State Department of Motor Vehicles is already housed in the Atlantic Center, and the City of New York is the largest tenant of Bruce Ratner's MetroTech complex. When Ratner's projects fail to succeed in the marketplace, his friends in government bail him out by leasing space.
Posted by eric at 11:51 AM
January 14, 2009
Voinovich Was Free and Easy With Public Money
The Cleveland Leader
by Roldo Bartimole
Forest City Enterprises' affinity for the public purse figures in a story on Ohio Senator and former Cleveland Mayor George Voinovich, who announced recently that he would not seek re-election in 2010.
Halle’s was one of the first, a $7-million UDAG (Urban Development Action Grant) for Forest City Enterprises. It was sold by Voinovich’s executives as a deal that would earn the city profits. None ever came, unless your name was Voinovich.
One Voinovich brother got the contract as leasing agent; another a deal at Tower City [NLG: Tower City is a large Forest City development in downtown Cleveland]. As an example of how profitable it could be, Victor Voinovich got $84,000 in commissions as the leasing agent for one Halle’s occupant - Climaco, Climaco, Seminatore & Leftkowitz, as it was known then. (If anyone wants a rundown - rich in detail - it’s available in Point of View, Vol. 19, # 16.)
Forest City got into the UDAG business full-time and came away with millions of dollars in free money. Voinovich fashioned most UDAGs at no interest with principal payable at the end of the loan, usually 20 years out. A sweeter, more profitable deal could not be made by any business. UDAGs were given to a number of Tower City projects, including the Ritz-Carleton [sic], which also got 100 percent tax abatement.
Posted by eric at 9:43 AM
FCR is a crap landlord
The Footprint Gazette
"Fo-Gazy" has had his share of crappy landlords, but Forest City Ratner leaves him foaming, just not at the mouth:
My current landlord hasn't been faced with a similar disaster, thank goodness, but I am confident that were one to arise, FCR, the owner of my apt. building, would do terribly. I have been trying to get in touch with our property managers for three (3!) months to handle a couple of repairs. My kitchen is falling apart and my bathroom requires a plumber. I have called or emailed just about every week, sometimes several times per week and have either been blown off or ignored each time. The management company is Esquire Management, and they can only be described as negligent. The photos to the left are of our front steps, which have been gradually falling apart. Recently an attempt to keep the steps from crumbling was made. See that hard foam that was sprayed into the cracks on either side? Looks nice don't it? Why stop there? There are a lot more cracks on those steps that could use a good foaming.
Posted by lumi at 5:54 AM
January 13, 2009
Early Spring Cleaning
CNBC Fast Money Rapid Recap
Hedge fund manager and CNBC commentator Karen Finerman reiterates her short position in Forest City Enterprises.
Personally, I think the economy is going to get worse from here. As a result I’m short commercial real estate by being short the iShares Dow Jones US Real Estate [IYR] as well as short Forest City [FCE.A].
link (with video — Forest City comments @ 0:50)
"FCE, which is Forest City, they are doing the Atlantic Yards which is the Nets project, a very, very troubled project, they have a lot of debt coming due in the short term."
Posted by eric at 12:45 PM
Forest City stock takes hit
Denver Post Wire Services
Forest City Enterprises fell 16 percent in New York trading after Moody's Investors Service said the property developer's credit outlook is negative because of high debt.
Moody's rates Cleveland- based Forest City's senior unsecured debt B1, four levels below investment grade. About 58 percent of the company's debt is secured by assets, a position Moody's called "aggressive."
Forest City is working on a $4.2 billion development in Brooklyn, N.Y., known as Atlantic Yards, and has delayed construction on residential and retail components of that project because of a global credit shortage. It's going forward with an arena at the site for the NBA's New Jersey Nets.
NoLandGrab: We'd like to see an example of how the arena is "going forward."
Posted by eric at 11:06 AM
January 12, 2009
Inquiry Highlights New Mexico’s Few Ethics Laws
The NY Times
By James C. McKinley Jr. and Michael Haederle
Forest City Enterprises makes a cameo in an article about New Mexico Governor Richardson's ties with campaign contributors, after he had "to forgo a cabinet post in the Obama administration."
One of the largest donors to Mr. Richardson has been Forest City Covington, a joint venture that is developing Mesa del Sol, a 12,900-acre tract of state-owned land just south of the Albuquerque airport.
From 2002 to 2007, Mr. Richardson’s two political action committees, his re-election campaign and his presidential campaign received more than $290,000 in cash and in-kind contributions from Forest City Covington and members of the families that control the company.
NoLandGrab: There's no mention that Atlantic Yards developer and NY Times developement partner Forest City Ratner is a wholly owned subsidiary of Forest City Covington partner, Forest City Enterprises. Maybe the relationship was deemed too circuitous to explain. Actually we're a little surprised that Forest City didn't get a pass in this case.
Atlantic Yards Report, In New Mexico, cloud over Gov. Richardson includes $290,000 from Forest City affiliates and representatives
Norman Oder notes that:
It wasn't like the press hadn't been pointing this out. On 4/10/07, the AP ran an article bluntly headlined Richardson Signs Bill Benefiting Donor. It began:
Democratic presidential hopeful Bill Richardson received about $150,000 in gubernatorial campaign contributions the past two years from a developer that benefits from taxpayer-subsidized bonds authorized in legislation he signed last week.
Among its contributions, the developer, Forest City Covington, gave the New Mexico governor the use of a leased corporate airplane for three trips last year that were valued at $21,727, according to a review of lobbyist expenditure and campaign finance reports by The Associated Press.
Richardson's office said the company's political contributions didn't influence his decision to sign the bonding legislation. "The governor makes decisions based upon what is best for the state - period," said Jon Goldstein, a spokesman for Richardson.
The company emphasized that its campaign contributions complied with state election law. New Mexico allows unlimited contributions from corporations and other donors. Federal law, however, limits contributions to presidential campaigns.
"The only influence we desire is that of continued economic growth and development for New Mexico," Anne Monson, a spokeswoman for the development, said in a statement.
But Massie Ritsch, a spokesman for the Center for Responsive Politics, a Washington-based nonpartisan group that tracks money in politics, said $150,000 was "a lot of money from one company to one politician."
NoLandGrab: Richardson's office claims that contributions from Forest City Enterprises didn't influence his decision? Now executives at Forest City must be thinking, "damn, we coulda saved a lot of money if the guy was gonna sign the bill anyway."
Posted by lumi at 5:29 AM
January 8, 2009
Latest from FCR's foundation: $100K+ to Markowitz series, BAM, Brooklyn Museum, Polytechnic (+ $1M for WTC memorial)
Atlantic Yards Report
A review of Forest City Ratner Companies Foundation's filing to the IRS shows how goodies are distributed to groups that are friendly with the developer. Recipients include Brooklyn Borough President Marty Markowitz, the Brooklyn Museum, the BAM LDC, and the Polytechnic University
There's some new money for Brooklyn Borough President Marty Markowitz, but the most dramatic thing about the latest Internal Revenue Service filing from the Forest City Ratner Companies Foundation--which last April I called shadowy because of its lack of transparency--is that the total dispensed during tax year 2007, $1.89 million, exceeds the aggregate given out during the three previous years.
...
Corporate generosity, in this case, serves to bolster ties with charitable and nonprofit organizations in Brooklyn that, not coincidentally, can reciprocate support for FCR endeavors. For some other charities, such as Memorial Sloan-Kettering Hospital, the motivation may be simpler; Bruce Ratner's on the board.
The foundation's activities are often under the radar. Its officers, as I described, are FCR executives and employees; there's no web site for grant-seekers to use, nor listed criteria for grants, nor publicly announced call for contributions. The phone number is the FCR switchboard. Nor is the list of donees described in as much detail (address, purpose) as in the IRS reports from other foundations.
Read the rest to see who got what and what the benefit of such giving is for Forest City Ratner.
Posted by steve at 5:49 AM
January 7, 2009
Forest City Enterprises stock rises 28.25%
Atlantic Yards Report
Norman Oder continues the stockwatch of Atlantic Yards overdeveloper Forest City Enterprises:
Yesterday, the stock rose $1.87 to $8.49, a 28.25% rise. Four other firms in the property management sector rose (nearly) 15% or more.
Forest City stock began to rise after noon. Perhaps not coincidentally, the developer issued a press release stating that the Forest City-New East Baltimore Partnership had a new tenant at the Science + Technology Park at Johns Hopkins: the Brain Sciences Institute of the Johns Hopkins University School of Medicine.
But a deal to occupy 25,000 square feet of office space isn't enough to move the market that much. Perhaps some institutional investors were making decisions.
Posted by lumi at 5:19 AM
FIPS UNDERCOVER: Target, Atlantic Center Mall [The Seventh Level of Hell]
FIPS posted undercover footage of empty aisles at the Target in Bruce Ratner's Atlantic Terminal Mall*.
This is part one of our four part series in which we attempt to uncover, once and for all, why the hell Target at the Atlantic Center Mall sucks a big dick.
We double dawg dare you to try to conjure up a more poorly run, haphazardly stocked, woefully understaffed shit show of a retail establishment...a-n-y-w-h-e-r-e.
*FIPS was so deeply undercover that they misidentified Target's location. It's in the Atlantic Terminal mall, not the Atlantic Center.
NoLandGrab: Actually, back in the day, we can remember bodegas in the Lower East Side that never seemed to have anything on the shelves, save one or two small boxes of laundry detergent. Never could tell how they stayed in business.
Posted by lumi at 5:04 AM
January 6, 2009
Forest City in the News
Here are some bits of non-Atlantic Yards-related news concerning developer Forest City Enterprises:
GlobeSt.com, Demolition Underway for $108M Presidio Project
SAN FRANCISCO-Forest City Enterprises is spending the next few months tearing down the non-historic “wings” of a former hospital complex here as it prepares to renovate its historic core and add space en route to a 161-unit rental community. The former Public Health Service Hospital is located at the foot of the Golden Gate Bridge within the Presidio, a sprawling former army base that has been under redevelopment for more than a decade.
Forest City landed $67.5 million in construction financing for the estimated $108-million project in November, 18 months after it signed the related development agreement with the Presidio Trust. The demolition, which began in December, will take four months to complete. Completion of the renovation and new construction is slated for late 2010. Forest City hopes to achieve LEED-Gold certification for the project from the US Green Building Council.
Cleveland.com (Plain Dealer), Analysis: Frank Jackson's influence on medical mart in doubt
Cleveland's Medical Mart project is still limping along, as a final decision for the site location has yet to be determined. This has got to be driving cash-strapped Forest City Enterprises executives crazy, since one of the sites is owned by the development company:
Commissioners will decide on a site for the complex after MMPI presents them with an analysis of two possible locations: Tower City and the current Cleveland Convention Center. They had wanted to pick a site by Jan. 15. The latest delay will push the decision to mid-February.
A spokesman for Forest City Enterprises last week said he was hopeful [Mayor] Jackson's involvement would move things along. The company owns Tower City and has been frustrated with the project's stagnation.
Conntact.com, It's Winstanley's Town; We Just Live in It
In addition, Forest City Enterprises, a $10 billion publicly-traded real estate company headquartered in Cleveland, is negotiating with the Science Park Development Corp. to convert the old gun factory, known as Tract A, into a mixed-used residential and commercial development.
Posted by lumi at 4:50 AM
January 5, 2009
More details emerge about Forest City Ratner bailout of ACORN: did Bertha Lewis mislead her board?
Atlantic Yards Report
Norman Oder follows up on blogger Anita MonCrief's most recent entry regarding the financial relationship between ACORN and Forest City Ratner.
ACORN whistleblower Anita MonCrief--who has an ax to grind but has presented accurate information--offers more details about the agreement between Forest City Ratner to bail out the struggling national organization ACORN, headed on an interim basis by Bertha Lewis, who as head of New York ACORN signed the controversial Atlantic Yards housing agreement with the developer.
MonCrief suggests the deal was approved after the fact.
...Moreover, though the New York Times, according to MonCrief, knew of the deal, the newspaper neglected to write about it. However, as I detailed last month, the Times wrote about a roughly equivalent bailout of ACORN.
It's time for another look.
Posted by eric at 10:49 AM
ACORN and FCR: Did they Dupe Brooklyn?
Anita MonCrief
The blogging ACORN whistleblower Anita MonCrief has published a new post about the loan and grant extended by Forest City Ratner to ACORN, which calls into question the veracity of ACORN Chief Organizer Bertha Lewis's dealings with her own board.
As with all major power consolidations (or as it is known to students of history: a coup d’état ) there are snags and other loose ends that need to be taken care of. In this instance, that dangling piece of thread is the Atlantic Yards debacle. As reported earlier, Forest City Ratner gave ACORN a loan of 1.5 million dollars back in September. According to several members of the ACORN Board, Bertha Lewis lied on several occasions regarding the timing of the loan and whether Board approval was ever received.
Careful review of the loan agreement shows that a letter was sent to ACORN dated August 19, 2008 from Forest City Ratner that stated Forest City Ratner would make a loan to ACORN in the amount of 1 million dollars and give ACORN Institute 300,000 now and 100,000 in August of 2009 and 2010. What is even more interesting is the date on the signed agreement between Bertha Lewis and FCR, September 4, 2008 (for copies of the contract please email me). According to emails that I have in my possession, Bertha Lewis confirmed the loan to the New York Times on September 25, 2008, and she stated that the loan was signed on September 8, 2008 and dispersed around September 12, 2008. The email goes on to show that Bertha's recollection of how she got approval to take this money from good old Bruce might have been a little faulty, or as one board member puts it:
“Bertha,
This does not fly with me. When I had [asked] for a copy of the loan agreement from Forest City [Ratner], you told the young lady no! I have since talked with an attorney and was told that I have every right as a member of this board to ask for these documents. This is [impertinent] behavior from you....
NoLandGrab: Will the mainstream media give FCR and ACORN a pass on this, or might they actually look into these troubling allegations?
Posted by eric at 10:40 AM
January 4, 2009
Richardson Withdraws as Commerce Nominee
The Wall Street Journal
by Jonathan Weisman
What does Bill Richardson have to do with Atlantic Yards? Forest City Enterprises was one of the biggest donors to the presidential campaign of the erstwhile nominee for Secretary of Commerce, and New Mexico is home to the company's giant Mesa del Sol project.
New Mexico Gov. Bill Richardson withdrew his nomination as President-elect Barack Obama's commerce secretary Sunday, citing a federal grand-jury investigation into a "pay to play" scheme in his home state, Obama transition officials said.
Just days ago, Republican Senate aides said they didn't believe the investigation of CDR Financial Products would be a major impediment to Mr. Richardson's confirmation. But the probe appears to be heating up. Mr. Richardson hired a personal lawyer last month and in mid-December, the grand jury began taking testimony from a slew of witnesses.
The grand jury is investigating how the company won more than $1.5 million in work advising the state of New Mexico after making contributions to Mr. Richardson's political action committees. The "pay-to-play" investigation is trying to determine whether the governor's office had any role in the contracting decisions.
NoLandGrab: Might the grand jury take a gander at the arrows connecting Richardson, Forest City and Mesa del Sol, too? Regardless, FCE is losing a friend at Commerce.
Posted by eric at 4:40 PM
In Fresno, new mayor wary of lingering FCE project; developer's rep claims commitment
Atlantic Yards Report
The new mayor of Fresno, CA, Ashley Swearingin, is wary of a delayed development called South Stadium, an 85-acre mixed-use project promised by Cleveland-based Forest City Enterprises.
...
At a debate in September, Swearingen, a Republican who led the Fresno Regional Jobs Initiative, said, "[L]et me speak in general terms and say that from a policy standpoint I never really supported or endorsed the idea of an exclusive negotiating agreement with Forest City. I think it’s the wrong way to go about downtown revitalization. Once it was done it was done and I was curious to see the outcome and I think thus far we just really haven’t seen anything, particularly when the Proposition 1C dollars were handed out and the Forest City project did not receive the funding that they expected to receive. So I think there are certainly red flags on that project."Exclusive negotiating agreement? Doesn't she know that in New York, the president of the New York City Economic Development Corporation said of Atlantic Yards, "So, they came to us, we did not come to them. And it is not really up to us then to go out and try to find a better deal. I think that would discourage developers from coming to us, if every time they came to us we went out and tried to shop their idea to somebody else. So we are actively shopping, but not for another sports arena franchise for Brooklyn."
Posted by amy at 9:49 AM
January 3, 2009
Sports Bubble Primed to Burst
Minyanville
Andrew Jeffery
Another real-estate developer turned sports mogul, Bruce Ratner, may be wishing he'd stuck to skyscrapers rather than sky-hooks. Ratner owns the New Jersey Nets, and, along with Forest City Enterprises (FCEA), is trying to build the team a new $950 million Brooklyn complex. Legal troubles and financing difficulties have stalled development; Forest City has stopped work on all other existing projects.Ratner isn’t any more beloved than Zell: Nets fans have no desire to make the trek across the Hudson for games, and Brooklynites aren't interested in seeing luxury condos go up in their backyards.
Posted by amy at 10:03 AM
January 2, 2009
$75-MILLION OF COUNTY TAXES FOR SPECIAL INTERESTS
REALNEO
The Northeast Ohio online community thanks Cleveland-area taxpayers on behalf of Forest City Enterprises, for the $42 million Convention Center subsidy generated by a 0.25% hike in the county sales tax.
What have you done lately for Randy Lerner, Sam Miller, Albert Ratner, Tim Hagan, the Cleveland Orchestra or the Playhouse Square Foundation?
Plenty.
You may not know it but as a resident of Cuyahoga County you have been extremely generous to these richest of our rich.
The figures are in through December for a number of Cleveland and Cuyahoga County taxes.
...The $42 million is the result of the one-quarter percent sale tax increase voted by two people – Hagan and Jimmy Dimora. No real public debate. Absolutely no public vote.
So thank you from Sam Miller & Al Ratner.
That is, of course, if the dysfunctional Cleveland and Cuyahoga leadership can ever get their act together to start building the new Convention Center for Sam, Al and Forest City Enterprises.
NoLandGrab: Of course, Forest City didn't bother to thank taxpayers, since they look upon the public subsidy as an "entitlement."
Posted by eric at 11:06 AM
December 31, 2008
Forest City Ratner On The Web
Atlantic Yards Report
Forest City Ratner's lean new web site emphasizes completion of projects
It's "Out with the old, in with the new" on the intertubes as Norman Oder takes a look at the newly-revised Forest City Ratner web site finds a lot fewer pages to look at. The old site had 7 pages chock-a-block with graphics and a nifty blue color theme. Now, it's down to 4 austere pages (including "Contact Us" and "Terms of Use").
Maybe the truncated new web site for Forest City Ratner, currently just two pages, embodies current lean times. Or maybe the site, which offers less information than its previous incarnation, is just a work in progress, with links coming to projects like Atlantic Yards and Ridge Hill.
Bruce Ratner's bio, currently missing from Forest City Ratner's web site
Also gone, at least for now, from the Forest City Ratner web site is the biography of CEO Bruce Ratner.
Just in case Bruce Ratner's bio--which was apparently written in 2004--doesn't reappear on the revamped Forest City Ratner web site, here's a look at the old one, courtesy of the Internet Archive. The screen shot captures only part of the text, which is reproduced below.
You are invited, dear reader, to look at Atlantic Yards Report to read the entire splendiferous bio. Here on No Land Grab, we just include this paragraph that predicts a project named Atlantic Yards:
On a site adjacent to Atlantic Center, Mr. Ratner is preparing to construct Atlantic Yards, a 7.7 million-square-foot mixed-use development designed by internationally acclaimed architect Frank Gehry. Encompassing 8 acres of public open space, more than 2 million square feet of commercial space and more than double that amount of residential space—at a variety of price points, including affordable housing—Atlantic Yards will be anchored by the 800,000-square-foot, 18,000-seat Barclays Center arena, designed to be the home of the Nets professional basketball team, recently purchased by a group of investors led by Mr. Ratner.
Posted by steve at 4:18 AM
December 30, 2008
Following up on Morningstar's claim that Forest City Enterprises stock would be worthless
Atlantic Yards Report
When Morningstar recently said that Forest City Enterprises stock was likely worthless, it took several days--even after it was picked up by the Washington Post--for FCE to respond forcefully, plausibly stressing that the consensus of other financial analysts was that the stock should be a buy.
Since then, there's been some interesting criticism from an anonymous financial analyst commenting on Cleveland journalist Jill Miller Zimon's blog Writes Like She Talks.
Basically, the anonymous financial analyst doesn't think that the young Morningstar analyst has the experience or expertise to pan Forest City Enterprises's stock, which still doesn't answer the original question, "Why did it take Forest City Enterprises so long to respond?"
Posted by lumi at 5:15 AM
December 28, 2008
The Crappy Quality of Forest City Ratner Cafe
Daily Gotham
By Mole333
Mole333 takes his son the Brooklyn Children's Museum, and the child has a wonderful time. Then it comes time to eat. The museum's café is chosen. The results were not so pleasing.
The hot dog was just this side of soggy. The pizza was horrible. It was the kind of artificial tasting crust with metallic tasting sauce and cheese that looked like softened plastic that I despise. I am very tolerant of pizza. With pizza and with turkey and stuffing dinners I like even mediocre versions...even kind of liked the versions served in my college cafeteria, though with a degree of masochism, I suppose. The Children's museum cafe pizza was the second worst I have ever, ever had. I found myself thankful that it was so tiny. I had subsidiary food for Jacob (mango, nuts, cereal bars) that he was happy to eat. But I just went hungry rather than get anything else from the cafe. Most of the other people in the cafe seemed unenthusiastic about their food as well, though that could just have been the fact that everyone was dealing with hungry kids.
Then, finally, on exiting, a final stomach-churning discovery is made.
As I was leaving, I saw the name of the cafe. It explained everything. Had I seen it at the start I would have skipped it and tried pretty much anything else in the neighborhood. The horrible cafe with hot dogs even my hot dog loving son wasn't keen on and pizza even pizza loving mole333 could barely stomach was the "Forest City Ratner Cafe."
Bruce Ratner offering the community substandard goods is something I have come to expect. If only I had known in advance I would have known to avoid the place like the plague.
This item them ends with a helpful suggestion list of four food establishments within a short walk of the museum, all without the appetite-suppressing name "Forest City Ratner".
Posted by steve at 8:47 AM
December 27, 2008
Morningstar calls Forest City stock worthless, but FCE vehemently objects
Writes Like She Talks
This is further to an earlier report on Forest City's stock being awarded an estimated value of $0 by Morningstar. This blog entry asks the questions: Why did it take Forest City over two weeks to respond to the Morningstar evaluation and why did the Cleveland Plain Dealer fail to cover to story until Forest City responded?
This news may not be news to people who follow Forest City Enterprises more closely than I do, but I hadn’t seen anything about any of this until this morning in this post at Atlantic Yards Report, a blog that does follow FCE very closely.
First, Morningstar, on 12/9/08, in an article subtitled, “We’d prefer a pack of gum to these businesses”:
...
The Washington Post writes about it on 12/21/08 in an article called, “Not Worth the Paper They’re Printed On”:
...
The Atlantic Yards Report feels that FCE’s concerns are reasonable, and I have no idea how these things work My only question is, why did it take more than two weeks for Forest City to issue this rebuttal? And, again, it looks like this battle over the rating has been kept very very down-low. Given the economic times, that’s not surprising, but is it proper news provision on the Plain Dealer’s part?
The day before the Morningstar analysis was published, on 12/8/08, the PD published this item about FCE withholding dividends, but the Plain Dealer didn’t publish anything about Morningstar’s 12/9/08 review of FCE until two days ago, on 12/24/08, more than two weeks after Morningstar published its review. Do not even try to convince me that the PD didn’t know about the Morningstar pan before then. Then, the FCE objection was published…yesterday, two and a half weeks after the hit.
So - only if it comes home, we hear about it? Otherwise, it’s too business wonky?
Posted by steve at 8:04 AM
December 26, 2008
It Came from the Blogosphere...
Luxury Property Blog, Luxury Real Estate Market Prediction 2009
It is crystal ball time for the luxury real estate industry, and for once, the industry seems to be in agreement. A few optimistic Florida realtors aside, the consensus is there is only one way to go in 2009. More of the same and downward prices.
...The face of luxury real estate will change in New York, with developers already leaning toward rentals instead of sales. The developer of the Atlantic Yards project, Forest City Ratner, has stated it would shift focus away from expensive luxury condominiums in favor of rental apartments during the first phase of construction. Personally, I think this is wishful thinking, and I don’t see the project getting off the ground any time soon.
Stocks & Politics, FCY: Forest City Enterprises Senior Bond (FCY)/FCZ
The decision making process on whether to buy the senior note issued by Forest City Enterprises is producing a heated debate in my own head.
...Personally, a prolonged downturn in commercial real estate, coupled with liquidity issues for a heavily indebted company, can topple even the best managed company. This is a very close call for me. After having a debate with myself and calling a vote, which was 4 to 3 in favor of a nibble only at a price below the current bid, I placed a limit order for 50 shares a few minutes ago.
Will the order get executed? Read on...
Stocks & Politics, FCY: Odd lot limit order filled
I am about to leave HQ for the day, and just checked my order page. The 50 share buy of the Forest City senior bond was filled when the 9.95 bid was just hit. In an honest appraisal of my own decisions to buy FCY and FCZ, I would have to characterize those decisions, taken together, to constitute proof beyond a reasonable doubt of going off my rocker, hopefully temporarily, but I would hasten to add my exposure is insignificant for me in my defense.
Posted by eric at 4:06 PM
Forest City Enterprises "astonished and appalled" at Morningstar for calling stock worthless
Atlantic Yards Report
Norman Oder analyzes the debate over the value of Forest City Enterprises' stock.
I don't know whether Morningstar typically contacts senior-level executives before issuing such a dramatic assessment, but Forest City's grievance seems reasonable. (If only they would reciprocally answer questions from the press themselves.)
The analysts who are neutral or slightly positive on the stock should count for something--indeed, the consensus among five analysts tracked by Yahoo is 2 on a scale of 1 (Buy) to 5 (Sell), with two at Strong Buy, one at Buy, and two at Hold. The analysts haven't exactly distinguished themselves by publicly asking hard questions of the company. But I think neither they nor Morningstar based their reports on a close look at Atlantic Yards.
Maybe they and the Morningstar analyst could put their cards on the table and have a debate.
NoLandGrab: Wonder what rating these analysts had on FCE stock 18 months ago, when it was trading above $70.
Posted by eric at 8:08 AM
Forest City fights back
Firm rebuts negative stock assessment
Cleveland Plain Dealer
by Michelle Jarboe
Forest City Enterprises Inc. on Wednesday strongly disagreed with a recent Morningstar Inc. article, saying the author's opinion that Forest City's stock is worthless was based on flawed assumptions and inaccurate interpretations of the company's debt obligations and its construction costs.
"We disagree in the strongest possible terms with Morningstar's opinion," spokesman Jeff Linton wrote in a statement. "Further, we are astonished and appalled that Morningstar would issue such an opinion without having made contact with Forest City."
Linton said no Morningstar representative has contacted or spoken to any senior-level executive at Forest City in two years. In a recent article, Morningstar analyst Matthew Coffina named Forest City among five stocks that he considered to have a fair value of zero. Five analysts who regularly cover Forest City have taken a neutral stance on the stock or expect it to perform slightly better than the market.
"We remain stable, with good liquidity and solid cash flow from our operations, and we have implemented a strategy to specifically address current market conditions," Linton said. Forest City shares closed Wednesday at $5.59, down 14 cents or 2.44 percent.
NoLandGrab: The market will ultimately decide who's right, but with large debt obligations coming due and the company giving away tickets to Nets' games, things don't look too rosy for Forest City.
Posted by eric at 7:56 AM
December 24, 2008
Who's in control? Forest City and the indirect subsidy value of its "entitlements"
Atlantic Yards Report
After that, Forest City Ratner gained its "entitlement," a word favored by Forest City Enterprises CEO Chuck Ratner, a word that indicates that the developer controls the pace, a phrase used last month at a real estate industry conference.
Chuck Ratner, speaking to investment analysts on December 10, said, "Despite the slow-down, we retain our core development capacity, as well as a reservoir of entitled opportunities where we can re-start additional vertical development, largely on our schedule, with modest carrying costs. When conditions improve, we will be able to take advantage of these opportunities."
(Emphasis added)
...As I wrote, the obligations, as so far expressed in the City and State Funding Agreements, give Forest City Ratner a long leash. The developer has 6 years after the delivery of property via eminent domain to build the arena and 12 years to build Phase 1--and can get away with building 44% less square footage than approved.
The penalties for a delayed arena for Phase 1 are quite modest. There's no timetable for Phase 2.
So the City and State Funding Agreements might be considered another form of indirect subsidy--a benefit to the developer without an actual outlay of government funds.
NoLandGrab: Back in the day, someone living off a bevy of entitlements was known as a "welfare queen."
Posted by eric at 9:37 AM
December 23, 2008
Forest City Announces Major Milestones for Mesa del Sol Project
Forest City Enterprises via International Business Times
CLEVELAND, Dec. 22 — Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced two major milestones for Mesa del Sol, a 12,900-acre, mixed-use project in Albuquerque, N.M.
On Dec. 5, Mesa del Sol announced an agreement with Sandia National Laboratories to partner on research, development and demonstration of energy technologies in a real life environment at Mesa del Sol.
On Dec. 10, Mesa del Sol held a ribbon cutting ceremony for phase one of a new, 210,000-square-foot office building for a business unit of Fidelity Investments.
"Forest City and Mesa del Sol are proud to partner with Sandia, one of the nation's leading energy research and development laboratories, and Fidelity Investments, one of the world's largest providers of financial services, to create jobs and help ensure a sustainable and prosperous future for Albuquerque," said Charles A. Ratner, president and chief executive officer, Forest City Enterprises. "These milestones demonstrate Forest City's continued success in delivering on our development pipeline and establishing vital partnerships with premier organizations for our large-scale, mixed-use urban communities."
Sandia National Laboratories
As part of the newly announced agreement, Sandia and Mesa del Sol will be able to advance technical work already underway toward the goal of achieving the nation's energy objectives and meeting national energy needs, while providing a foundation for job creation in the energy and sustainability fields.
Development of solar technologies will be one focus of the research and demonstration projects. Mesa del Sol is already home to solar industry companies SCHOTT Solar and Advent Solar.
The partnership will help Sandia meet Congressional and U.S. Department of Energy priorities for advancing alternative and renewable energy initiatives, with the added benefit of forming a valuable public/private partnership. While many of the projects will take place at Mesa del Sol, additional programs are also scheduled for Forest City's residential communities for military families in Honolulu, Hawaii.
Fidelity Investments building
The new office building, which sits on the north end of Mesa del Sol's Innovation Park, is fully leased to Fidelity's Human Resource Services business, which provides corporate clients with payroll, health and welfare and other human resources services.
In January, New Mexico Gov. Bill Richardson announced that Fidelity would become a tenant at Mesa del Sol. The new building was erected in less than 12 months, and Fidelity employees are currently moving in to the new facility. Initially, 300 Fidelity associates will work at the new building, with 1,250 expected at full occupancy. Phase two of the building will be ready for the tenant in 2009.
The Fidelity building was designed to achieve LEED Silver certification, but is now anticipated to earn a Gold certification instead, making it the first LEED Gold office building at Mesa del Sol. LEED, which stands for Leadership in Energy and Environmental Design, is a rating system developed by the U.S. Green Building Council to guide sustainable construction and renovations.
About Mesa del Sol
Mesa del Sol is being developed by Forest City Covington NM, LLC, a joint venture between Forest City NM, LLC, a subsidiary of Forest City Enterprises, and Covington NM, LLC, an affiliate company of Covington Capital Corporation. For more information, visit Mesa del Sol's Web site at http://www.mesadelsolnm.com.
About Forest City
Forest City Enterprises, Inc. is a $10.9-billion, NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. For more information, visit the Company's Web site at http://www.forestcity.net.
Posted by eric at 1:15 PM
As analysts call Forest City Enterprises stock worthless, local elected officials get a vague update on Atlantic Yards
Atlantic Yards Report
In light of ongoing lawsuits, federal intervention in the credit markets and the news that Morningstar just rated Forest City Enterprises' stock as worthless, Norman Oder speculates about the development company's options for more subsidies and delays for Atlantic Yards, and concludes, "if Forest City Ratner seems to be fighting hard to maintain Atlantic Yards, it may be because the parent company itself is at stake."
Posted by lumi at 5:18 AM
Developers, too, ask for bailout as massive debt looms
The Cleveland Plain Dealer reporter Michelle Jarboe added some details about Forest City Enterprises to the Wall St. Journal story on the commercial real estate sector's need for fast credit:
Forest City has not taken a lead role in this campaign, but company executives have discussed the lobbying efforts with trade associations, said spokesman Jeff Linton. Forest City faces more than $2.1 billion in debt maturities through Jan. 31, 2011, according to a recent regulatory filing. About half of that had been dealt with as of Dec. 2 or can be extended, but Forest City still must refinance more than $1 billion in debt during the next 25 months.
"In a general sense, we're supportive of anything that will help to get the credit markets working again," Linton said. "And if the idea of having some aspect of a government loan guarantee or some other involvement by the federal government helps improve the perception of risk associated with lending for commercial real estate . . . we're certainly all for that."
A spokeswoman for Developers Diversified did not respond to a request for comment Monday.
Rich Moore, an analyst who follows Forest City and Developers Diversified, said he had not heard about the companies making requests for assistance from the government or the Federal Reserve. But, he said, real estate developers and owners need to try every possible measure to get debt during this credit crunch. "It's less about 'How good are my properties?' and 'How strong are my tenants?,' and more about 'Will somebody please make me a loan?,'" said Moore, an analyst with RBC Capital Markets in Solon.
NoLandGrab: The Federal Government has been doing all it can to get the credit markets working again, but it appears that some real estate developers are more highly leveraged than others. However, the one commercial real estate developer renowned for its expertise in lining up subsidies (aka "corporate welfare") has assumed what might be a catastrophic amount of debt — might the two be related?
Posted by lumi at 4:59 AM
December 22, 2008
Five More Stocks with Zero Value
We'd prefer a pack of gum to these businesses.
Morningstar
by Matthew Coffina
Here's the original report from Morningstar, picked up yesterday by The Washington Post.
Last month, we highlighted five stocks, each with a fair value that we estimated at a nice, round "zero." Since then, zero-dollar fair value estimates have experienced a virtual renaissance, with the total number of such calls more than doubling to 32 (Click here to see a full list). I thought this phenomenon merited a second look, so this month, we present five more stocks that look completely worthless to Morningstar's team of analysts.
Before diving into this month's picks, there are two things I'd like to address. Last time, an adoring fan sent me an e-mail to express just how valuable he found my article--about as valuable as the featured stocks. He had a valid point though. So what if we think these stocks are worthless? What are you, as an investor, supposed to do about it?
Well, we probably wouldn't recommend shorting these stocks. In many cases, the share prices have already fallen near zero, leaving little upside and potentially infinite downside. Also, put options are rarely available at a strike price that would make them worthwhile.
As with most of our 1-star calls, the primary intended audience is the company's existing shareholders. After all, if you can sell something worth $0 for 50 cents, you're getting a terrific deal. Besides, our primary goal in generating fair value estimates is to be as accurate as possible given the available information. If we think a stock is worthless, there's no point in saying otherwise.
...Forest City Enterprises (FCE.A)
From the Analyst Report: "At nearly 83%, Forest City's debt/total gross PP&E is much higher than peers'. With EBITDA/interest expense expected to dip below 1 times during the next three years, Forest City could face severe financial distress, since it may need to refinance debt at ever-increasing interest rates while operating cash flow declines."
NoLandGrab: Another audience that ought to be paying close attention — beyond current FCE shareholders — is those New York State and NYC elected officials contemplating shoveling more taxpayer money at the company's stalled Atlantic Yards project.
Posted by eric at 4:45 PM
Forest City Celebrates the Opening of Hamel Mill Lofts
Forest City Enterprises via PR Newswire
CLEVELAND, Dec. 19 -- Forest City Enterprises, Inc.(NYSE: FCEA and FCEB) today celebrated the opening of the first building at Hamel Mill Lofts, a collection of high-end, historically renovated rental apartment buildings in Haverhill, Mass.
"Hamel Mill Lofts is a great project in a great location that emphasizes our Company's commitment to Sustainability through the adaptive re-use of a historic, century-old shoe factory complex," said Charles A. Ratner, president and chief executive officer of Forest City Enterprises. "The completion of phase one of Hamel Mill Lofts further demonstrates Forest City's ability to deliver on its construction pipeline, even during our country's current economic recession."
NoLandGrab: Here's a more local example of Forest City's "commitment to Sustainability through the adaptive re-use of a historic, century-old... factory complex."
Phase two of Hamel Mill Lofts is scheduled to be completed in 2009.
"We are excited to bring another quality Forest City development to the greater Boston area, one of our Company's core markets," said David Levey, executive vice president of East Coast development, Forest City Residential Group. "Haverhill has several qualities we look for in the cities we choose to work in. The downtown is situated near a scenic river and right next to the highway, and we're right across the street from a commuter rail station. Hamel Mill Lofts showcases smart growth development at its best."
For the community, Forest City utilized historic and low-income housing tax credits, in addition to the State of Massachusetts' Smart Growth Zoning tool that promotes sustainable development.
Hamel Mill Lofts is currently leasing, with the first residents moving in earlier this month. For leasing information, visit http://hamelmilllofts.com or call 978-372-5638.
Amenities at Hamel Mill Lofts include a WiFi cafe, theater room, fitness center and landscaped courtyards, along with ample on-site parking. The apartment homes at Hamel Mill Lofts feature three different finish packages, more than 40 floor plans, along with state-of-the-art kitchens, energy-efficient appliances, in-suite washers and dryers, open-beamed ceilings and large windows.
About Forest City
Forest City Enterprises, Inc. is a $10.9-billion, NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. For more information, visit the Company's Web site at http://www.forestcity.net.
Posted by eric at 11:33 AM
December 21, 2008
A Private War
Bill Moyers Journal
Forest City appears on a list of private companies bidding for military housing government contracts in a Bill Moyer's expose. Why would Forest City be interested?
In the Bush administration you have a wish to turn over to private industry the business of government. In turning over of government to private industry, to release them from oversight. There is a lot of logic behind the idea, one of the logics is that, if only government were to operate like private industry, then government would be a more efficient operation. But if you think about it, what if they spent money like the executives of Lehman Brothers and Enron? Do we really want our governments operating like that?
...
It's a very good deal, because you get homes for free to manage, and to collect rents on, you get up front money from the taxpayer and the rents are provided by the taxpayer because those are in the form of housing allowances given to military personnel. They are going to control that property for 50 years.
Posted by amy at 11:39 AM
December 19, 2008
Forest City gets more time to show Fresno the goods
Fresno Bee
by Bill McEwen
Not that long ago, Forest City Enterprises was the sexiest new name in Fresno.
The Ohio-based developer brought a record of success, urban expertise and financial clout to town.
Most of all, Forest City had the star power that appeared important in rebuilding downtown Fresno and capitalizing on taxpayer investment in the downtown stadium.
Mayor Alan Autry loved Forest City and the City Council loved Forest City. Soon the media were producing stories about the amazing transformation that might occur south of the stadium and chasing Fresno's attempts to land an anchor tenant such as Bass Pro Shops or IKEA to spur retail development.
Now, not quite five years later, the national economy is in free fall, Forest City is no longer flush with money and the company's good name is just as likely to elicit yawns -- or anger -- as excitement in Fresno.
But fear not, Fresnonians — Forest City is pressing on, with the help of its government backers and, if it gets lucky, more public subsidies.
But the City Council -- at least the one that listened to Smartt's report -- still sort of loves Forest City. On Tuesday, it wisely extended the firm's exclusive negotiating agreement for the South Stadium Project for another six months into mid-2009.
...What does six months buy Forest City and Fresno taxpayers?
Time for Forest City to pursue state and federal money to close an estimated $100 million financing hole in the $300 million project.
Posted by eric at 1:29 PM
December 18, 2008
Why Bloomie is Campaigning for Caroline Kennedy
Runnin' Scared [Village Voice blog]
by Wayne Barrett
Should Atlantic Yards opponents be concerned at the prospect of Senator Caroline Kennedy, D-NY?
Bloomberg's 2009 campaign and Kennedy's 2010 campaign will be run out of the same offices at Knickerbocker SKD, where consultant Josh Isay already helped orchestrate the term limits coup for clients Bloomberg and Council Speaker Christine Quinn, and where he is now trying to help pull off his second coup in three months by securing the Clinton seat with a resume-reinvention for Ms. Kennedy.
Knickerbocker SKD produced Forest City's liar flyers, including the infamous high-rise-free glossy issued in May, 2006, and also served as a consultant to Tracy Boyland's unsuccessful Ratner-backed bid to unseat State Senator Velmanette Montgomery later that year.
Isay runs a consulting firm that literally feasts on its ties to Bloomberg. His clients include the Partnership for New York City, the NYC Cultural Institutions Group, NYC & Co., Forest City Ratner, Primary Care Development Corporation, and the Building Trades Employers Association, all of which do business with Bloomberg City Hall. He's got a metal bat company out of California that lists itself as having lobbied the mayor against a council ban, and a taxi company that's approved by the Taxi & Limousine Commission to put driver and passenger information monitors in cabs. He did the television ads for PlaNYC 2030, the premier initiative of the Bloomberg administration, paid for by the Real Estate Board of New York and others.
NoLandGrab: This is a must-read for those of you interested in political gamesmanship in NYC and Albany.
Posted by eric at 12:07 PM
The Ponz: Madoff Mess Has Real Estate World Reeling
Curbed
 |
No indication yet that The Bruce himself was invested with Bernie Madoff (Ratner appears to prefer the guaranteed returns of huge public subsidies), but the giant Ponzi scheme appears to have touched at least one of his business partners.
As the names of big-time real estate heavyweights—Mort Zuckerman, Fred Wilpon, Glenwood Management, etc.—continue to trickle out in connection with accused Ponzi schemer Bernard Madoff, we've been awaiting the definitive, air-clearing account of just how bad the scandal has screwed the real estate world (especially since the threats starting rolling in). Today, the Times comes pretty darn close to unleashing that exposé. There are tales of hundreds of millions in losses, developers on the verge of collapse, an array of potentially doomed projects and scores of panicked investors looking to unload their apartments right now—only there are few details given as to the identity of those poor panicked souls. One of the specific examples given is the Blumenfeld Development Group, whose owner "invested heavily" with his close friend Madoff. Blumenfeld is a partner with Forest City Ratner on the flag-waving, Target-sporting hope of East Harlem, East River Plaza. A spokesman for Blumenfeld says the megamall (above) will be completed, but the company's other development plans are uncertain.
Posted by eric at 11:53 AM
December 17, 2008
Trading The Real Estate Bounce
CNBC Fast Money Final Call
by Lee Brodie
Some real estates shares, including the iShares Dow Jones US Real Estate ETF, rallied on the news of yesterday's unprecedented Fed rate cut...
But Karen Finerman isn’t fooled. In fact she sees a trade. She’s short real estate because she doesn’t think the Fed’s actions have materially changed the commercial real estate picture in this country.
“I’m short Forest City,” she tells Dylan Ratigan on CNBC’s Closing Bell. “(They’re probably best known for the Atlantic yards development in Brooklyn.) They were a development company and that’s not a business model that’s working. And they have a lot of debt.“
Posted by eric at 11:00 PM
Packin' Up?
pacificisland via You Tube
Looks like the boys over at Forest City Ratner might be breaking down their staging area at Dean Street and Flatbush Avenue. Could the cessation of all work on the Atlantic Yards project be obviating the need for large steel construction plates?
NoLandGrab: Once again a day late and a dollar short, Forest City Ratner appears to have missed the lucrative black market in scrap metals.
Posted by eric at 9:27 PM
More Forest City Delays
KFSN, ABC
Fresno, CA, USA (KFSN) -- A plan to revitalize a large part of Downtown Fresno is being delayed ... again.
The 100 million dollar South Stadium Project covers eighty-five acres south of Chukchansi Park. Plans call for a multi screen movie theater, apartments and retail stores but in the last few years there have been several obstacles and setbacks.
The developer wanted a one year extension so it could continue working exclusively with the city of Fresno but the council amended that request to six months in hopes of finally getting the ball rolling.
Forest City Enterprises burst onto the Fresno scene with grand promises of revitalizing the city's lackluster downtown with retail stores and housing. That was four years ago and there has yet to be a single shovel break ground. Tuesday Forest City asked the Fresno City Council for a six month extension to work out its plan. It would be their third extension, which prevents the city from talking with other developers.
Posted by lumi at 4:34 AM
December 15, 2008
Trees return (temporarily) to the perimeter of the Atlantic Yards footprint
Atlantic Yards Report
Like a crafty veteran pitcher who sets you up away and then comes inside, Norman Oder snuck this one past NoLandGrab yesterday.
Well, there are now some (temporary) trees around the perimeter of the Atlantic Yards footprint, as the photo I took today of the corner of Flatbush Avenue and Dean Street shows.
Last month, I wrote how, preparing to demolish 86 street trees (aftermath at bottom) around the Atlantic Yards footprint, Forest City Ratner contended last year that it did not need to pay $159,000 in partial restitution to the city because the trees in the Atlantic Yards open space eventually would “add much more value than the trees that will be removed during construction.”
Posted by eric at 10:40 AM
December 14, 2008
Atlantic Yards: Information Sharing Recordkeeping, Part 9
Develop Don't Destroy Brooklyn
In the February 26, 2008 NY Observer Forest City Ratner spokesman Loren Reigelhaupt said:“When it comes to sharing information with the public and governmental bodies, there’s no such thing as too much, as far as we are concerned."Today Norman Oder quotes from a Courier-Life article (not yet online) about Ratner/ESDC's non-transparency regarding the stoppage of work on Vanderbilt Yards and the Carlton Avenue bridge. From the Atlantic Yards Report's coverage of reporter Stephen Witt's article:...Now we can relax. An unnamed Empire State Development Corporation spokesman informs the Courier-Life's Stephen Witt, "Forest City Ratner has told us there are no changes in the schedule at this time" to reconstruct and reopen the half-demolished Carlton Avenue bridge.That's more than I got out of the ESDC, which referred me to the developer. Witt also tried, but FCR "refused comment on the matter."
Posted by amy at 10:31 AM
December 12, 2008
See what develops
Crain's Cleveland Business
by Scott Suttell
While we've been keeping an eye on what transpires in Cleveland, home of Forest City Ratner parent company Forest City Enterprises, Cleveland has apparently been keeping an eye on what's going on in Brooklyn.
A new show from the Independent Film Channel contends that developer Bruce Ratner — the New York branch of Cleveland’s Ratner family — used his influence to get a New York Daily News reporter pulled from covering the Atlantic Yards megaproject in Brooklyn.
In Tuesday’s episode of The IFC Media Project, reporter Ali Farahnakian looks at why the big New York newspapers have soft-pedaled coverage of Atlantic Yards, which has generated controversy among residents opposed to the project’s scope and use of eminent domain. It’s helpful in this context to know that Mr. Ratner is the developer of The New York Times’ new skyscraper near Times Square.
Unfortunately, the episode isn’t available to watch online. (I have it on my DVR if you want to come over and watch.) But an anti-Atlantic Yards blog, NoLandGrab.org, has a summary of the show, the biggest scoop of which is the contention that former Daily News reporter Deborah Kolben was removed from covering the project when Mr. Ratner’s “top people” complained about her reporting.
NoLandGrab: Thanks for the props, guys, but our summary was actually a summary of Norman Oder's Atlantic Yards Report post. As usual, AYR did the heavy lifting.
Posted by eric at 12:28 PM
Why the fog? Behind Chuck Ratner's obfuscation about why AY is on hold
Atlantic Yards Report
Norman Oder answers his own existential question:
Q. When is something not on hold when it's on hold?
A. When it's Atlantic Yards.
Forest City Enterprises CEO Chuck Ratner said Wednesday that the company was putting "virtually all new development" on hold. Except Atlantic Yards.
If that were true, then Ratner should have continued, "When lawsuits are cleared, we will begin construction."
Instead, he said, "We remain committed to this and when we get--and we believe we will--successfully through the last of the litigation in 2009, we’ll evaluate the market at the time and see what our next steps are."
So, it's on hold.
However, Ratner's obfuscation (fancy word for "lie") was well worth it, because it pretty much confused every mainstream media organization that tried to cover the latest news.
Posted by lumi at 5:27 AM
December 11, 2008
Market Doesn't Like What Ratner Was Selling in Analyst Call
Develop Don't Destroy Brooklyn comments:
Forest City Ratner's parent company Forest City Enterprises' (FCE-A) stock continued its two day decline since its midday third quarter analyst call yesterday (December 10th) . Yesterday it was down 15%. Today it was down 22% to $5.46, up quite a bit from its recent 52-week low of $3.26, but down drastically from its 52-week high of $48.31
Posted by lumi at 8:48 PM
The Gift of Giving
Barclays/Nets Community Alliance press release via Brooklyn Daily Eagle
The great philanthropist Bruce Ratner, who has laid waste to Prospect Heights while gorging himself at the public trough, is spreading holiday cheer in Bushwick.
The Barclays/Nets Community Alliance, which includes a partnership between Barclays, the Nets and Forest City Ratner Companies (FCRC), brought holiday fun and toys to hundreds of children in Brooklyn yesterday at The Salvation Army’s Bushwick Community Center.
The event featured Nets players Josh Boone, Bobby Simmons, Maurice Ager, Chris Douglas-Roberts, Trenton Hassell (pictured above) and Stromile Swift, who delivered a truckload of toys to 250 children attending an after-school program.
Nets mascot Sly was also there to help entertain the kids.
“No child should ever be without a toy during the holiday season,” said Nets owner and Downtown real estate magnate Bruce Ratner.
NoLandGrab: It pains us to publish stuff like this, but we've pledged to post all Atlantic Yards-related news (and "news"). But shame on the Brooklyn Eagle for regurgitating this pabulum while failing utterly to take a critical look at the Atlantic Yards project.
Posted by eric at 11:11 AM
Forest City Puts a Halt To New Work
The Wall Street Journal
by Alex Frangos
Real-estate developer Forest City Enterprises Inc. said it will halt new projects and focus on reducing debt and managing its existing real-estate portfolio.
..."Forest City has heavy debt and heavy development, both of which are a problem these days," says Rich Moore, analyst at RBC Capital Markets. The company has $2 billion of debt maturities over the next two years, according to company filings. Real-estate debt markets have seized during the past year, creating headaches for property owners needing to refinance mortgages and replace construction loans.
Forest City said it will continue some developments it has already started, including the $4 billion Atlantic Yards project in Brooklyn, N.Y. Plans for the 22-acre site include offices, apartments and a basketball arena.
The company has spent five years working on Atlantic Yards. Lawsuits and the weak economy have delayed the start of major construction, and Forest City faces the maturity of an Atlantic Yards development loan from lender Gramercy Capital Corp. in February 2009.
Forest City hasn't disclosed the size of the Gramercy loan. But according to New York City records, Gramercy lent Forest City $153 million for land at the site. "We're actively engaged in the negotiation on extending the terms," Mr. Ratner said during the conference call.
NoLandGrab: Apparently, Forest City is "continuing" to develop its Atlantic Yards project by halting all work on it.
And based on the company's past M.O., turning to the public purse for yet more help will surely be a key strategy.
Posted by eric at 10:36 AM
December 10, 2008
Forest City to emphasize operations rather than development
Crain's Cleveland Business
By Stan Bullard
Forest City Enterprises Inc. (NYSE: FCEA, FCEB) is doing the switcheroo to deal with the global credit crunch.
In a conference call with analysts and investors today, Charles Ratner, Forest City CEO, said, “The near-term effect is that we are going from a developer with an operating company to becoming a real estate operating company with a development capability. We did that in the early 1990s” during the commercial realty credit crunch after the savings-and-loan crisis.
That is how Mr. Ratner summarized the $10.9 billion Cleveland-based company’s decision to “put virtually all new development on hold until the economy improves.”
...
While New York City newspapers last weekend questioned whether Forest City could continue its huge 22-acre arena and mixed-use Atlantic Yards development in Brooklyn, Mr. Ratner said workers left the site because they completed some demolition work at the rail yard that the company had ordered. Forest City has completed all it can on the site until it resolves pending litigation related to the project, Mr. Ratner said.“It will take longer than we thought it would. It already has,” he said. “We remain committed to the project.”
NoLandGrab: Charles Ratner is totally making up that crap about completing all that it can on the Atlantic Yards site. For instance, there's the half-demolished Carlton Avenue bridge that has to be rebuilt, whether or not Atlantic Yards makes it off the drawing board.
Posted by lumi at 6:50 PM
Chuck Ratner repudiates cousin Bruce's AY 2018 pledge, says marketplace determines pace of project
Atlantic Yards Report
Norman Oder reports on today's Forest City Enterprises 3rd Quarter earnings conference call.
Despite Bruce Ratner’s pledge in May that “[w]e anticipate finishing all of Atlantic Yards by 2018,” his cousin Chuck Ratner, president and CEO of parent Forest City Enterprises today told investment analysts in a conference call that, while Atlantic Yards would take longer than expected, he couldn’t predict a timeline because it would be determined by the market.
(He was assuming that legal challenges would be cleared.)
Chuck Ratner, who though questioned would not estimate the costs of delay, also reaffirmed the developer’s commitment to the project and declared that city and state officials maintained that commitment. Also, unchallenged by the analysts, he flatly stated that the developer had completed all the work it could at the Metropolitan Transportation Authority's Vanderbilt Yard.
Ratner's statements about Atlantic Yards--firm commitment at no announced pace--suggest that Forest City is hedging its bets, hoping to attract new investors and/or additional government subsidies.
Click through for FCE's dodgy explanation of why they stopped working on Atlantic Yards last week, their attempts to renegotiate a big loan obligation, and Chuck Ratner's prognostications regarding the future of Cousin Brucie's megaproject.
NoLandGrab: So Forest City will build Atlantic Yards when market conditions will support it? What about neighborhood conditions?
Politicians in Albany and City Hall and Borough Hall have allowed Forest City to knock down more than two dozen buildings, and half of the Carlton Avenue bridge, blighting the community, cutting it off from adjacent neighborhoods and displacing hundreds of residents, and now the area will lie fallow until it becomes profitable for Forest City to move forward?
That's not even remotely acceptable. It's well past time for Governor Paterson to act in the interest of the people of Brooklyn, and the taxpayers, and pursue a more sensible, sustainable and achievable development program — like the UNITY Plan. Atlantic Yards needs to be removed from life (and public) support.
Posted by eric at 4:21 PM
Ratner Work Stoppage and Delay is Corporate Strategy.
Whither Public Policy?
Develop Don't Destroy Brooklyn
DDDB listened in on Forest City Enterprises' conference call with stock analysts today, and learned that, no, the two lawsuits it's funding are not the reason that work was halted on the Atlantic Yards project last week.
Well today, on parent company Forest City Enterprises third quarter analysts call, CEO Chuck Ratner said, "We've put all new development on hold until economic conditions improve meaningfully." He included Atlantic Yards in his run down.
So the rail yard work stoppage is due purely to corporate strategy, not litigation.
Meanwhile, as the Carlton Avenue bridge stands half-demolished, and the state and city seem content to let Forest City decide when to resume the work on this important piece of public infrastructure, DDDB has what seems like a sensible suggestion.
It's time for some good public policy at the proposed development site, instead of corporate strategies.
Posted by eric at 3:41 PM
REMINDER: Forest City Enterprises Third-Quarter 2008 Earnings Conference Call
As Atlantic Yards Report blogger Norman Oder wrote yesterday:
The Plain Dealer pointed out that companies typically hold conference calls only for second- and fourth-quarter earnings reports.
So this one's special.
Here's the press release reminder from PR NewsWire:
CLEVELAND, Dec. 9 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc., (NYSE: FCEA and FCEB) has released its third-quarter 2008 financial results and will hold a conference call on Wednesday, December 10, 2008 at 11:00 a.m. ET to discuss these results. Investors are invited to dial into the conference call hosted by Charles A. Ratner, president and chief executive officer, or to listen to a live webcast of the call through www.forestcity.net .
The conference call is scheduled for 11:00 a.m. ET, Wednesday, December 10, 2008. To participate, dial 888-680-0865 using access code 53917944, approximately five minutes before the call. Tell the operator you wish to join the Forest City 3rd Quarter Earnings Conference Call. (International callers, please dial 617-213-4853)
A live webcast of the call will also be available online at www.forestcity.net .
Please use the following link to pre-register for this conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. You may pre-register at any time, including up to and after the call start time.
To pre-register please go to: https://www.theconferencingservice.com/prereg/key.process?key=PTBD78GPL
The call will be replayed from December 10, 2008, 1:00 p.m. ET to January 10, 2009, 11:59 p.m. ET. The replay number is 888-286-8010, access code 53989009. (International callers, please dial 617-801-6888) The webcast replay will be available at www.forestcity.net.
Atlantic Yards Report, At today's conference call, will investment analysts finally ask FCE some tough questions about Atlantic Yards?
Since investors and watchdogs are being invited to LISTEN IN to the conference call, there will be no opportunity for Norman Oder to ask questions. But that didn't stop him from creating a crib sheet for analysts who can:
At the conference call and webcast today, perhaps the analysts will finally have done some homework. I've provided a cheat sheet below.
The questions range from the timeline of the project in general, to the timing of the disposition of lawsuits, to the ownership of the land, to the suspension of work and the need for additional subsidies.
Posted by lumi at 5:39 AM
December 9, 2008
Community Newspaper Group Moves to MetroTech
Brooklyn Daily Eagle
by Linda Collins
The MetroTech building that is currently home to JP Morgan/Chase, the National Grid and NY Life Insurance, will soon be home to the Community Newspaper Group, reportedly New York City’s largest group of neighborhood newspapers with 30 publications.
Forest City Ratner Companies (FCRC) announced Monday that the company, better known by its initials, CNG, has signed a lease for 18,000 square feet on the 10th floor at One MetroTech Center in Downtown Brooklyn.
Recent layoffs at Forest City Ratner may have freed up the space.
CNG will move to its new home on Feb. 1, according to a spokesperson. It is taking space previously occupied by Forest City Ratner, which is moving to another location within the building.
Posted by eric at 10:27 AM
Forest City Financial News
Yesterday, Atlantic Yards developer Forest City Enterprises announced third-quarter results and the company's plans to suspend dividends (press release).
The Cleveland Plain Dealer, Forest City losses widen; CEO expects economy to get worse
In a nutshell, due to the recession and a write-off caused by the Lehman Brothers bankruptcy:
Forest City's quarterly loss hit $18.5 million, or 18 cents per share, compared to a loss of $10.8 million, or 11 cents per share, during the same quarter of last year. Earnings before depreciation, amortization and deferred taxes -- a performance measure known as EBDT -- fell to $44.1 million, or 42 cents per share, from $68.8 million, or 64 cents per share, during the three months that ended Oct. 31, 2007.
...
During the first nine months of the year, Forest City lost $67.1 million, or 65 cents per share, compared to $39.8 million, or 38 cents per share, at this time last year. EBDT fell to $148.4 million, or $1.39 per share, from $174.5 million, or $1.62 per share during the first nine months of 2007. Forest City attributed the drop to factors including losses on dropped development projects. The company also shouldered a larger share of pre-tax losses -- $16.8 million -- on the New Jersey Nets basketball team, of which Forest City is a 23 percent owner.
Atlantic Yards Report, Forest City suspends dividend, announces major slowdowns, reaffirms commitment to "key projects" (presumably AY)
Norman Oder considers how this news relates to the stalled Atlantic Yards project:
[P]resident and CEO Chuck Ratner, in a press release, indicated that the developer has not formally backed off Atlantic Yards: "We remain committed to projects already under construction and to key, high-profile developments in core markets."
While Forest City Ratner has stalled work at the Metropolitan Transportation Authority's Vanderbilt Yard, spuriously blaming it on litigation, the parent company's announcements yesterday suggested a need to conserve cash flow.
...
[G]iven that the developer's New York affiliate Forest City Ratner has already gained government approvals for Atlantic Yards, it's plausible to believe that Forest City is willing to hold on over the long-term.
...
On the other hand, the continued losses the company faces owning the New Jersey Nets, as well as the need to build a new arena to spike the team's now-sinking value, has to put pressure on Forest City to move forward.
Despite multiple setbacks, Oder believes that the project, in some form, still stands a chance of being built.
Posted by lumi at 4:24 AM
December 8, 2008
Rupert Murdoch's Weekly Papers Move To Downtown Brooklyn
NY Observer
by Dana Rubinstein
Rupert Murdoch will consolidate the offices of his chain of weekly newspapers into one 18,000-square-foot space in Bruce Ratner's One Metrotech Center, the 24-story Class A building at 70 Myrtle Avenue, according to an annoucement released this morning.
The group of newspapers, called, appropriately enough, the Community Newspaper Group, includes the Bronx Times Reporter, as well as two chains -- TimesLedger and Courier-Life -- that Mr. Murdoch bought in 2006 for a rumored $16 million.
NoLandGrab: Judging by the Courier-Life's coverage of Atlantic Yards, we'd have guessed they were already tenants of Bruce Ratner.
Posted by eric at 1:59 PM
Forest City Enterprises suspends dividends
Real-estate developer Forest City Enterprises suspends dividends to maintain liquidity
AP via Yahoo! Finance
Forest City Enterprises Inc., which develops commercial and residential real estate, said Monday its board voted to suspend quarterly cash dividends on its Class A and Class B common shares.
The suspension will take effect after the 8-cent per share dividend payment scheduled for Dec. 15.
"In the current economic and financial market conditions, maintaining liquidity is our highest priority," said President and Chief Executive Charles A. Ratner in a statement. "The board felt this was an appropriate action to preserve cash."
Ratner said the board will reevaluate its decision when economic and market conditions improve.
In October, Standard & Poor's Rating Services cut the Cleveland-based real-estate developer's credit ratings further into junk, or noninvestment grade, status.
NoLandGrab: Hmm, must be those pesky lawsuits again.
Posted by eric at 11:43 AM
December 6, 2008
Obama taps corporate welfare maven for Commerce Secretary
DC Examiner
Timothy P. Carney explains Obama's pick of Forest City Bill Richardson as Secretary of Commerce:
If you’re looking for how Richardson wielded the government purse to benefit private enterprise, start by checking out his campaign finance reports. His second-largest corporate source of money in his 2008 presidential bid was a developer called Forest City Enterprises.The name jumps out because “Forest City” hardly sounds New Mexican. Indeed, the company is based in Cleveland, but Richardson has earned their love.
In Richardson’s second term, he supported and signed the “Tax Increment for Development Act,” perhaps the most important in a string of subsidies for Forest City’s massive Albuquerque-area development called Mesa del Sol. Tax-increment financing is an arrangement whereby Forest City wins the right to pocket future tax payments after Mesa del Sol increases the value of the land.
Forest City Executive Vice President James Ratner was candid in a 2007 interview with Governing magazine about one factor in the company’s success: using big government and politicians’ ambitions for profit. The path to profit, he explained, is through “a partnership ... with government that gives them what they want, and gives the company what it wants.”
Posted by amy at 10:16 AM
December 4, 2008
Atlantic Yards project location sees work halted abruptly
Daily News
by Jotham Sederstrom
One of New York's daily newspapers picks up on the story first broken yesterday by Norman Oder of the Atlantic Yards Report.
Work has abruptly halted at a key location of the controversial Atlantic Yards project, raising the possibility of additional delays on the $4.2 billion plan.
Forest City Ratner insists that work stoppage is due to lawsuits, which is strange since no lawsuits have prevented work from being done on the Vanderbilt Yards in the past and, of course, none of the property owners live on the train yard.
A spokesman for developer Forest City Ratner said Wednesday construction at the Vanderbilt Rail Yards - where an NBA basketball arena and 16 towers are planned - would not resume until a lawsuit against the developer is settled.
...
The developer's decision to suspend work last week marks a reversal of an earlier commitment to continue construction despite a barrage of lawsuits that has slowed work on the project.
..
Every delay is potentially damaging to the megaproject in a global credit crunch where cash is getting more scarce.
...
Though the developer claimed preliminary work was completed, an update from the Empire State Development Corp., said additional work - such as plans to remove debris, assemble train trestles and other construction - was slated for last week.
Those plans never materialized as workers were told two weeks ago to finish up what work they could before a deadline last week, said an employee who was laid off, speaking on the condition of anonymity.
...
"They're stopping the work because they're having financial problems," said Daniel Goldstein, a member of the anti-Yards group Develop Don't Destroy Brooklyn.
Posted by steve at 8:00 AM
Why has the New York Times ignored Forest City Ratner's bailout of ACORN?
Atlantic Yards Report
One might think that after running a story in the National section about how ACORN (one of the groups signed onto the Community Benefits Agreement for the proposed Atlantic Yards development) was financially bailed out, The New York Times might want to do a follow-up story when ACORN received further assistance. One would be mistaken when the company doling out the goodies is Forest City.
In case The Times changes its mind, and decides to run the story, Norman Oder has written it for them.
When the embezzlement of almost $1 million by the brother of the founder of the Association of Community Organizations for Reform Now, better known as Acorn, surfaced last July and led to a drop-off in donations and news of taxes owed, the organization quietly recruited funds from a partner in New York City's most controversial development project.
That partner was Forest City Ratner, the developer of the Atlantic Yards project in Brooklyn, which has signed a Community Benefits Agreement that includes a housing deal that requires ACORN to publicly support the $4 billion project.
Forest City Ratner is an ally of Bertha Lewis, ACORN's interim chief organizer and the replacement for Wade Rathke, its leader until the scandal broke.
And yes, there's a reason the Times should have made a special effort to be exacting in its coverage. It would be explained thusly:
(Forest City Ratner was the development partner with the New York Times Company in building the recently opened Times Tower in Midtown.)
Posted by steve at 4:45 AM
Someone's made some good money on rising Forest City Enterprises stock
Atlantic Yards Report
On November 21, when Forest City Enterprises stock hit a low of $3.42, I wrote, "Either Forest City Enterprises is headed for oblivion or it's a very good buy."
Well, after two days of huge leaps, it's up to $8.90. That's still way below the 52-week peak of $50.06, but investors who took the plunge less than two weeks ago have been richly rewarded.
NoLandGrab: Without knowing who is buying or selling and what their basis is, one can't tell if anyone is being "richly rewarded." You can say for certain that the stock is trading and that it is fluctuating more wildly than the rest of the sector.
However, shareholders were probably relieved to hear that Forest City has stopped construction activity at Atlantic Yards and would probably sleep easier if the company unloaded the NJ Nets.
Posted by lumi at 4:43 AM
December 3, 2008
FCE Press Release: Forest City Enterprises Notice of 3rd Quarter Earnings Conference Call
Wednesday, December 10, 2008, 11:00 A.M. ET
Forest City Enterprises (FCE.A, FCE.B) will release its 3rd quarter financial results on Monday, December 8, 2008, after the NYSE closing bell, and will hold a conference call on Wednesday, December 10, 2008 at 11:00 A.M. ET to discuss these results. You are invited to dial into the conference call with Charles A. Ratner, President and Chief Executive Officer.
The conference call is scheduled for 11:00 A.M. ET, Wednesday, December 10, 2008. To participate, dial 888-680-0865 using access code 53917944, approximately five minutes before the call and tell the operator you wish to join the Forest City 3rd Quarter Earnings Conference Call. (International callers, please dial 617-213-4853) The live broadcast will also be available online at www.forestcity.net.
NoLandGrab: This oughta be a good one.
Posted by eric at 2:05 PM
December 2, 2008
Preservation and Development, Engaged in a Delicate Dance
The New York Times
by Robin Pogrebin
The Times continues its "Preserving the City" series, and this time gets quickly to the crux of the issue.
Over a decade of whirlwind development, the Landmarks Preservation Commission has repeatedly played dance partner to a potent mix of preservationists, developers and city politicians. It must strike a balance between protecting architecture and accepting economic realities, between a responsibility to history and a knowledge that the city must evolve.
...Yet some preservationists and politicians assert that, under a mayoral administration that has emphasized new construction — from behemoth stadiums to architecturally bold condo towers — big developers have too often been allowed to lead on the dance floor. Some accuse the landmarks commission, charged with guarding the city’s architectural heritage, of backing off too readily when important developers’ interests are at stake.
“The real estate industry controls the agenda in the city,” said Tony Avella, a city councilman from Queens. “If they don’t want something to happen, it doesn’t happen. They pull the strings from behind the scenes, whether in rezoning reform or landmarking. It’s just incredible how much influence they have.”
Indeed. As in the following case, for example.
Yet the commission is faulted for refusing to schedule public hearings on some of the most fiercely contested projects, like Ward’s Bakery, an imposing terra-cotta-tiled structure that lay within the 22-acre footprint of the Atlantic Yards project in Brooklyn. In 2006 the commission’s staff determined that the building was not eligible for a hearing on landmark designation. Yet it was ruled eligible for a listing in 2003 on the National Register of Historic Places. Forest City Ratner tore down the bakery this year.
“This appears to be a political decision by the landmarks commission,” Daniel Goldstein, a spokesman for the group Develop Don’t Destroy Brooklyn, was quoted as saying at the time. “It is deeply frustrating that they have let politics enter their deliberation on a building that clearly deserves landmark status.”
A commission spokeswoman said of the bakery, “There are many other industrial structures like it around the city, and it had several branches throughout the city.”
NoLandGrab: We challenge the "commission spokesperson" quoted above to show us one example as fine as the Ward Bakery — if such a building still stands, it's a safe bet it doesn't lie in the footprint of a politically connected megadeveloper's megaproject.
Related...
Brownstoner, The Dance of Preservation and Progress
Posted by eric at 1:59 PM
November 25, 2008
Design Excellence in Newark Overshadows NYC
eOculus [AIA NY Newsletter]
by Ian Volner
It turns out NYC might just have reason to envy Newark, NJ. “They’ve just got so much open space to work with,” gushed NYC Department of Parks and Recreation’s Charles McKinney, reflecting on the sweeping plans for new housing and recreational projects presented by Newark Director of Planning Toni Griffin. With a much-depleted urban core and a newly energized city government under Mayor Cory Booker, Griffin is looking to draw on Newark’s present advantages — a thriving seaport and proximity to NYC — in remaking the face of the city. And she already has ambitious proposals coming from the likes of Richard Meier, FAIA, to help her do it.
NoLandGrab: One other thing Newark has that New York City doesn't is a sparkling new arena, which would make a perfect permanent home for the New Jersey Nets, the team that event co-sponsor Forest City Ratner stubbornly wants to move to Brooklyn.
Posted by eric at 1:04 PM
November 23, 2008
Public Good: Architect clubhouse introduces everyday citizens to good design
NY Daily News
JASON SHEFTELL
If you want your kid to become an architect rather than an astronaut, or you just want to know more about your physical surroundings, the Center for Architecture should be a constant on your to-do list.
...
Daniel Libeskind, architect for the Freedom Tower downtown, lectured at the center last month. So did Forest City Ratner’s MaryAnne Gilmartin. Current exhibits in the 15,000-square-foot, green-design LaGuardia Place home include a series on “hybrid” or mixed-use buildings, such as the Beekman Tower, by Forest City Ratner and architect Frank Gehry, and Harlem’s Renaissance Theatre.
article
NoLandGrab: If you want your kid to learn about greedy backroom dealings and ripping off the public through shady subsidies, send them to the Atlantic Yards Report School of Online Investigative Journalism.
Posted by amy at 11:06 AM
November 22, 2008
And, then, Forest City Enterprises stock price rises
Atlantic Yards Report
The price of Forest City Enterprises stock went up 15% yesterday, to $3.94 which was a very good deal for anyone who bought the stock on Thursday, when it it closed at $3.42.But it's still off 92% from its one-year high of $50.27. A day earlier, it was off 93%.
Posted by amy at 9:39 AM
November 21, 2008
Health of Forest City: not so Sterling
Writes Like She Talks
An Ohio blogger discovers Atlantic Yards Report, which prompts her to relate her own negative experiences with a Forest City Enterprises development known as Sterling Lakes.
I live in a town that is saddled with a little something developed by Forest City called Sterling Lakes which, to the best of my knowledge, has done not one single exemplary thing for our city and continues to be something that causes negative ripple effects throughout the four or so towns around it, mine included.
Many of us - though obviously not enough of us or enough of us who were in elected office and had a final vote - objected to Sterling Lakes from the start. We didn’t want the Porter property sold, we didn’t want it turned into a development and we didn’t want the development to be of homes that would primarily cost upwards of $800,000. Even a few years ago, some of us just knew that this region and the economy would not sustain such a project.
So, I suppose I’m glad tht FCE can see that something like that Baylee Properties would be an absolutely absurd undertaking, but I still sting, as do many of my neighbors, about how the Sterling Lakes project and all that it’s not reaped was pushed on us.
Posted by eric at 2:05 PM
1,000-acre plan scrapped
Cleveland company withdraws its plans for giant housing, retail project between Dublin, Marysville
The Columbus Dispatch
By Mike Pramik
An ambitious plan to turn nearly 1,000 acres of rural Union County land into a bustling community is being canceled.
Cleveland-based Forest City Enterprises, the proposed developer of Bayly Pointe, today plans to withdraw a zoning application it had filed with Millcreek Township.
Bayly Pointe was intended to include offices, retail space and more than 2,000 residences at the site, at the intersection of Rts. 33 and 42.
News of the cancellation came in a letter to township trustees, Millcreek Township Trustee Keith Conroy said.
...
Representatives of Forest City did not return calls seeking comment yesterday. However, in the letter to the township, Forest City cited the poor economy and infrastructure issues as reasons for the decision, Conroy said.
Atlantic Yards Report, As Forest City's stock continues to plunge, one project is scrapped
As the stock of Forest City Enterprises (FCE) continued its mind-boggling fall--down nearly 18% yesterday to $3.42, a new low, and 93% for the year--the casualties have begun.
This doesn't necessarily signal anything about the developer's plans for Atlantic Yards, because Bayly Pointe had not yet been approved.
The developer, and its local arm Forest City Ratner, surely aim to hold onto a project like Atlantic Yards that has increased in value by gaining governmental approvals. After all, they "control the pace."
But the tanking stock has to concentrate the mind. Either Forest City Enterprises is headed for oblivion or it's a very good buy.
Posted by lumi at 6:16 AM
Bad times at big mall
The Brooklyn Paper
By Mike McLaughlin
Bruce Ratner's Atlantic Terminal and Atlantic Center Malls made headlines in this week's "Police Blotter":
It’s almost the holiday shopping season, but thieves and weirdos were already working Bruce Ratner’s Atlantic Terminal and Atlantic Center malls on Nov. 10.
On that single day, there were three incidents. Here’s a roundup:
• A police officer engaged a sword-carrying shopper in armed combat inside an Atlantic Terminal store before arresting him.
...
• A tiny troublemaker swiped a woman’s wallet while she shopped in an Atlantic Terminal store on Nov. 10.
...
• A thief brazenly made repeated raids on a clothier inside Atlantic Center Mall.
Click here to read the details of these three remarkable crimes that will surely boost the overall official crime stats of Bruce Ratner's Atlantic Yards footprint, which is located across Atlantic Avenue from these malls.
Posted by lumi at 6:05 AM
Another Day, Another Drubbing for Forest City
Develop Don't Destroy Brooklyn continues the Forest City stockwatch:
Forest City Ratner's parent company Forest City Enterprises' stock continued its vertiginous descent into uncharted territory today, down 74 cents (17.79%) to $3.42. One month ago the stock price was $16.13. The stock is down 93% for the year.
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NoLandGrab: Granted the market has been in a freefall and the real estate sector has been hit especially hard, but watchdogs are having a hard time accounting for FCE-A's nosedive, unless investors are expecting some very bad news when the company reports 3rd-quarter earnings.
Posted by lumi at 5:52 AM
Research Center Moves Headquarters From Manhattan to Downtown Bklyn
Brooklyn Daily Eagle
Compiled by Linda Collins
Moving from offices on Seventh Avenue in Manhattan, the prestigious Social Science Research Council (SSRC), an independent, not-for-profit research organization, has signed a lease for 25,000 square feet on the 15th floor of One Pierrepont Plaza in Brooklyn Heights.
The SSRC, is relocating its headquarters — and its more than 80 employees — to Brooklyn to take advantage of lower rents, according to Forest City Ratner Companies (FCRC), the landlord, who announced the move yesterday.
Posted by lumi at 5:28 AM
November 20, 2008
Who's in charge? Forest City says "we control the pace" of Atlantic Yards
Atlantic Yards Report
The Empire State Development Corporation (ESDC) says the state is in charge of the Atlantic Yards timetable.
However, Forest City Enterprises (FCE), parent of Atlantic Yards developer Forest City Ratner, is telling the real estate industry that Atlantic Yards is among "Active Large Scale Projects Where We Control the Pace."
That message was within an FCE PowerPoint presentation for the 2008 NAREIT (National Association of Real Estate Investment Trusts) Annual Convention this week in San Diego. (The slides accompanied presentations made by FCE officials.)
Both the ESDC and FCE, of course, seem to be discounting the effect of pending litigation and the availability of credit and tax-exempt bonds on delay.
But the message from FCE, apparently, is that, given that the project has received government approvals, the developer is in the driver's seat.
NoLandGrab: If FCE stock continues to tank, and credit markets remain frozen, how long before the ESDC and FCE start saying "they're in charge, not us?"
Posted by eric at 8:51 AM
After 27% fall in stock price, how long before some news out of Forest City Enterprises?
Atlantic Yards Report
What should we make of the astounding continued fall in the stock price of Forest City Enterprises, parent company of developer Forest City Ratner?
The nearly 27% decline yesterday brought the stock to $4.16, nearly 92% below the stock's 52-week high.... The stock has fallen nearly 79% since October 10, when it was $19.79.
...How does the lack of investor confidence affect Atlantic Yards? Would the developer pull out? Well, the project passed governmental review, which is quite valuable--after all, the developer now says "we control the pace."
But the carrying costs of the project and the continued losses by the Nets basketball team have to hurt. Have the phone lines to Dubai, Russia, and other potential sources of rescue capital opened back up?
Posted by eric at 8:40 AM
November 19, 2008
Forest City Enterprises Ends Day Down 26.89%
Develop Don't Destroy Brooklyn continues to track the stock of Atlantic Yards developer Forest City Enterprises.
The stock price of Forest City Ratner's parent company—Forest City Enterprises—continues its precipitous nosedive, reaching a 12 year low. It closed today down 1.53 (26.89%):
Posted by lumi at 6:47 PM
It’s tree-son!
The Brooklyn Paper
By Sarah Portlock
As if NoLandGrab readers need a reminder that, when it comes to all things Forest City Ratner, things aren't always as they seem:
If you think the 15-foot Christmas tree in the Metrotech Commons looks too good to believe, you’re right.
On Saturday, workers did more than just spread joy throughout Downtown when they raised the evergreen — they performed cosmetic surgery!
The New Jersey-born evergreen arrived on a flatbed truck early on Saturday morning — along with a little buddy to provide replacement boughs for any that fell off in transit. A quick “triage” revealed that work was, indeed, required. So the construction crew brought out some paste and reinforcement wires to turn the crippled conifer into the arboreal equivalent of the $6 Million Man.
“We’re up there, supergluing the other branches back to the main tree,” one worker told The Brooklyn Paper.
...
A spokesman for Forest City Ratner, which owns the Metrotech complex, chose not to comment.
NoLandGrab: Well, what do you expect from a developer married to a plastic surgeon?
Posted by lumi at 5:56 AM
November 18, 2008
Forest City Enterprises Stockwatch
Develop Don't Destroy Brooklyn ran this screen cap, noting that Forest City Enterprises's share price reached an over-ten-year low yesterday, closing at 5.56.
 |
It is worth noting that Barclays Global Investors UK Holdings Ltd., an investment management subsidiary of Barclays Bank, which just publicly reaffirmed the lucrative naming rights deal for a new arena in Brooklyn, not long ago became one of the largest institutional investors in Forest City Enterprises.
On June 30, 2008 Barclays Global Investors purchased 2,440,986 shares at $32.21 for a total investment of $78,648,568. The current value is estimated around $13,571,882.
Since Barclays is so bullish about the project, might they double down while the stock is cheap?
Posted by lumi at 6:36 AM
November 17, 2008
How Forest City Ratner (quite possibly) saved $55 million on "Arena Land"
Atlantic Yards Report
Norman Oder digs up yet more subsidy for Forest City Ratner's Atlantic Yards project.
In June, I wrote that an unreleased appraisal might be hiding a city-enabled bonus of tens of millions of dollars for developer Forest City Ratner (FCR).
Now I can better estimate a number: $54.6 million.
That number, of course, is speculative, but the calculation is fairly straightforward. Forest City Ratner was reimbursed $100 million by the city for property in the Atlantic Yards footprint for which it spent $103.5 million.
But the property was more likely worth $158.1 million, based on the city's own valuation of development rights at a site reasonably close to the Atlantic Yards footprint. So that means the city's land subsidy could be considered not the announced $100 million but nearly $155 million, a bonus of some 55%.
NoLandGrab: While the Governor and the Mayor pay an extraordinary amount of lip service to "shared sacrifice," they continue to play a game of reverse-Robin Hood, taking from the taxpayers to line the pockets of the Sheriff of Nott..., er, Bruce Ratner.
Posted by eric at 10:35 AM
The New York Times, Enlightened
A Cutting-Edge Lighting System at the Publisher's Times Square Office Tower is Saving $300,000 in Energy Costs
The CoStar Group
By Andrew C. Burr
A state-of-the-art lighting system installed at the new 52-story office tower on Eighth Avenue is saving the publisher more than $300,000 annually in energy costs by outperforming what were thought to be ambitious efficiency expectations, by a jaw-dropping 70 percent.
...
The 1.5 million-square-foot office building delivered late last year and is co-owned by the Times and Forest City Ratner Cos., the New York-based property development firm which controls the upper 24 floors.
NoLandGrab: Aside from being a co-owner, Forest City Ratner was the developer. Though the building's lighting system is supposedly highly energy-efficient, Forest City Ratner did not complete LEED certification, which the company originally claimed it would.
Posted by lumi at 5:07 AM
November 13, 2008
FCR layoffs confirmed; parent company stock price continues to sink
Atlantic Yards Report
A week ago, I speculated that Forest City Ratner (FCR) had laid off some people working on the Atlantic Yards project, even as corporate officials at parent Forest City Enterprises (FCE) would not specify where there'd been layoffs.
Yesterday, there was partial confirmation, as the New York Post quoted sources saying there had been layoffs at FCR. Though no projects were specified, it's reasonable to believe that the company's most ambitious project couldn't have gone unscathed.
Posted by eric at 9:46 AM
November 12, 2008
DEVELOPERS CUTTING JOBS
SLOWDOWN IN MARKET BLAMED
NY Post
by Lois Weiss
The Atlantic Yards developer makes a cameo in this story about layoffs in the City's real estate industry.
With most commercial sales unable to get financing, and development stalled for the same reason, brokerages and title companies have been shedding staff.
And now developers are starting to make similar moves.
Tishman Speyer Properties, Forest City Ratner and Extell Development are among those that have had layoffs, sources said.
Posted by eric at 11:55 AM
November 11, 2008
Forest City in the News
The Cleveland Plain Dealer, Forest City says layoffs involved fewer than 160 people
Last week's layoffs at Forest City Enterprises involved fewer than 160 employees, up to 80 of them in the Cleveland area.
Forest City provided additional details about the layoffs Monday in response to inquiries from The Plain Dealer. The real estate company, based in Cleveland, said Wednesday that it was laying off a small percentage of its nationwide work force of 3,200, which included roughly 800 people in Cleveland.
A spokesman elaborated Monday, saying that the layoffs affected less than 5 percent of the company's employees and less than 10 percent of its Cleveland workers. He did not provide specific numbers. The layoffs resulted from the company's need to cut costs in the face of the economic slump and turmoil spreading from the housing market into the commercial real estate industry.
Current and former employees have described the mood at Forest City's headquarters in the Terminal Tower as tense and full of uncertainty. Some say they worry about what might happen if the economy sours further.
NoLandGrab: The mood at Forest City's Brooklyn subsidiary, run by cousin Bruce, can't be much better.
In this environment, Forest City has still been able to secure some money and move forward with projects. The company announced three deals Monday, comprising more than $167 million in financing.
The New York State Teachers' Retirement System provided a $75 million construction loan for a shopping center expansion in southern California. Wachovia Bank, RBS Citizens and the National Electric Benefit Fund teamed up on $67.5 million in construction financing for apartments in San Francisco. And KeyBank and Fannie Mae worked with Forest City on a $24.9 million refinancing of apartments in Cambridge, Mass.
MarketWatch, PRESS RELEASE: Forest City Announces $167 Million in Recent Financings
Posted by lumi at 5:47 AM
November 10, 2008
Forest City to trim work force
Crain's Cleveland Business
By Stan Bullard
Last week, we missed this article about the layoffs at Forest City Enterprises. Crain's didn't get any further than the Plain Dealer did in pinning down additional details about the workforce cuts:
Forest City Enterprises Inc. (NYSE: FCEa, FCEb), the Cleveland-based mega developer and property owner, confirmed today that it will lay off an undisclosed number of employees, although spokesman Jeff Linton described it as a “small percentage” of its national work force of 3,200.
...
Forest City’s largest concentration of employees is in Cleveland where it employs 800 people, but Mr. Linton declined to say if the largest number of job cuts is here. He said the layoffs are in various units of the company and span its geographic footprint, which stretches from New York City to Hawaii.
Posted by lumi at 5:18 AM
Premier Ad Agency Leases Space at One MetroTech
Brooklyn Daily Eagle
By Linda Collins
More on UniWorld Group's move to Bruce Ratner's MetroTech complex in Downtown Brooklyn:
[CEO Byron] Lewis’ firm, reportedly the nation’s largest African-American-owned ad agency, joins the city’s largest Hispanic daily newspaper El Diario La Prensa, online artist marketplace Etsy.com, global media company Incisive Media, architecture firm Interboro Partners, and urban design and planning cooperative The Metropolitan Exchange as tenants.
...
Lewis said he chose the MetroTech space for several reasons: “It was the most beautiful space in our price range, it was not far from our offices in SoHo, about 35 of our 135 employees already live in Brooklyn and for those who live on Long Island, the Long Island Railroad is handy. The transportation is ideal,” he said.
NoLandGrab: The article does not mention the tax credits, which according to Crain's, drove the asking rent below $30 a square foot.
ExpressEstates.in, Manhattan offices cross the river
Posted by lumi at 4:51 AM
November 6, 2008
Has Forest City laid off anyone working on AY? I'd bet yes
Atlantic Yards Report
Norman Oder plumbs the Cleveland Plain Dealer's report about layoffs at Forest City for clues as to where Atlantic Yards lies in the company's development queue.
A brief paragraph, I think, provides some clues about Atlantic Yards:
[Forest City Enterprises spokesman Jeff Linton] said the company remains committed to all projects already under way. "It's those far-future things that we've made the determinations that we need to slow down," he said.You might say Atlantic Yards is "already under way," given that the developer and affiliates have already invested $250 million.
However, FCE categorizes Atlantic Yards in the "initial development stage," one step behind the "shadow pipeline."
...But here's why I suspect Atlantic Yards is in the category of "those far-future things" cited by spokesman Linton. The developer can't have many people working on projects in the category that exists before the "initial development stage" category. So that latter category has to be a target for layoffs.
Posted by eric at 10:48 AM
Forest City Enterprises announces layoffs, won't say how many
The Cleveland Plain Dealer
By Shaheen Samavati
Due to the one-two punch of sagging demand and scarce credit, Atlantic Yards developer Forest City Enterprises is laying some employees off this week.
Spokesman Jeff Linton wouldn't say how many people are affected, but he said it's a small percentage of the company's work force of 3,200. Of those, about 800 work at the company's headquarters in downtown Cleveland.
The company also has offices across the country.
...
Forest City stock has taken a beating recently, with shares trading at about $11, down from about $50 at this time last year. It closed at $11.07 on Wednesday, down $1.08, or 8.9 percent."It isn't prudent to develop real estate without tenant demand or consumer demand," Linton said. "If that's your starting point, that's one strike against launching a new project. It's also increasingly difficult to finance that development anyway, so you've got two strikes against you."
He said the company remains committed to all projects already under way. "It's those far-future things that we've made the determinations that we need to slow down," he said.
Posted by lumi at 5:40 AM
Forest City in the News
Southtown Star, New Lenox voters back home rule
New Lenox, IL Mayor Tim Baldermann called mall developer Forest City Enterprises to deliver the good news about Tuesday's election:
Home rule will enable the village to levy a 1 percent sales tax July 1, bringing it up to 8 percent. That will be primarily paid by non-residents, officials said, while residential homeowners have been promised a property tax rebate.
Village leaders said they needed home rule powers to help them lure quality commercial development to town and pay for road improvements to accommodate the shopping traffic. The increased sales tax revenues will be used to finance roadwork.
CoStarGroup, Forest City Signs 54,500 SF in Deals at Tower City Center
Forest City Enterprises Inc. signed two new deals at the Tower City Center, one of Cleveland's premier mixed-use developments and the most recognized building in Cleveland.
The Cuyahoga Community College leased 38,079 square feet of office space, the full second floor of the Terminal Tower building, at 50 Public Square in Cleveland.
...
General Service Administration renewed and expanded its lease of 16,484 square feet in Skylight Office Tower at 1660 W. Second St.
NoLandGrab: What a coincidence, Forest City projects in Brooklyn have lots of government agencies as well.
Posted by lumi at 5:02 AM
November 5, 2008
Ad agency defects to Brooklyn
Crain's NY Business
A year and a half ago, Forest City Ratner and the Downtown Brooklyn Partnership began marketing MetroTech to the creative services industry.
Ratner has recently made some strides with some very helpful tax credits:
Advertising agency UniWorld Group Inc. is leaving Manhattan for Brooklyn, drawn by the borough’s cheaper rents and easy commute for its employees.
UniWorld, which is part of the WPP Group, inked a 10-year deal for 37,000 square feet at 1 MetroTech Center. The asking rent for the deal, which encompasses the entire 11th floor, was in the low $40s a square foot. However, a city program provides tax credits of up to $3,000 per employee for companies that relocate from Manhattan to downtown Brooklyn. That credit will knock around $12 a square foot off the rent, according to Joe Chan, president of the Downtown Brooklyn Partnership.
The tax credit drove the asking rent below $30 a square foot. Such low rents cannot be found in Class A Manhattan office towers, notes UniWorld’s broker, Shawna Menifee of Cushman & Wakefield Inc.
The NY Times, Office Tenants Flee Manhattan Rents for Brooklyn
At least nine Manhattan companies, including UniWorld, have signed new leases for Class A space in Downtown Brooklyn this year. The leases — for properties ranging in size from 4,000 square feet to 120,000 square feet — total nearly 300,000 square feet.
Although that would not make much of a dent in Midtown Manhattan, the Downtown Brooklyn market is relatively small. It has only about eight million square feet of Class A space, compared to nearly 180 million square feet in Midtown.
...
MaryAnne Gilmartin, executive vice president for commercial and residential development at Forest City Ratner, said the project would add up to one million square feet of office space, including a 600,000-square-foot tower. In addition, the company says it has the capacity to add almost one million square feet of office space in the MetroTech development.“If we build one, that doesn’t mean we wouldn’t build the other,” Ms. Gilmartin said.
But Ms. Gilmartin said Forest City Ratner would not build any new office space in Brooklyn until it had adequate advance leasing. She said that before the credit markets froze up this fall, the banks could finance buildings with 50 percent advance leasing. Although it is too soon to say what might happen once the credit markets thaw, she speculated that bankers might want greater advance leasing, perhaps as much as 60 to 75 percent.
So the office market in Downtown Brooklyn might remain tight for some time. There is some sublease space on the market; and JPMorgan Chase is looking to rent out a large block of space in its buildings in MetroTech. But Ms. Gilmartin said that 99 percent of Forest City Ratner’s space in MetroTech is leased. “We are sitting pretty now,” she said.
NoLandGrab: Something tells us that Forest City Ratner wouldn't be "sitting pretty" if every commercial building was subsidized to the same extent as MetroTech.
Posted by lumi at 5:59 AM
Real estate money split on Dems, GOP
Inman News
Atlantic Yards developer Forest City Enterprises was one of the top donors from the real estate industry in this past presidential race, with 73% going towards the Dems.
Those employed in real estate may have been rooting more for John McCain than Barack Obama, but all in all the industry's federal campaign contributions have been more evenly balanced between Democrats and Republicans in the 2008 election cycle than at any time since 1992, according the Center for Responsive Politics.
Individuals employed in the industry and real estate political action committees (PACs) have made $105.5 million in federal campaign contributions in 2007 and 2008, according to the center's analyses of reports released by the Federal Election Commission (FEC) and published at OpenSecrets.org. Of those contributions, 49 percent went to Democrats and 51 percent to Republicans.
...
Based on reports released Oct. 19, the Center said real estate organizations with the most contributions by both employees and PACs were the National Association of Realtors ($3.36 million), Fannie Mae ($1.1 million), the National Association of Real Estate Investment Trusts ($790,175), The Villages ($725,300), Realogy Corp. ($700,469), the Mortgage Bankers Association ($699,425), Newmark Knight Frank ($626,100), the National Multi Housing Council ($594,492), Forest City Enterprises ($516,800), and Freddie Mac ($509,067).
NoLandGrab: Over half a million going to the election with nearly three-quarters to the Dems, that's not chump "change."
Posted by lumi at 5:09 AM
November 2, 2008
A tall order: Louisville company restoring a Cleveland landmark
CantonRep.com
Forest City executive Jeff Linton said the company takes great pride in preserving the Tower."It is symbolic of Cleveland in so many respects," said Linton. "We have a stewardship responsibility as its owner to maintain and preserve it because of its meaning for Cleveland and the people of Cleveland."
article
NoLandGrab: Maybe it's easier for FCR to respect Ohio, since they are FROM Ohio.
Posted by amy at 9:27 AM
October 31, 2008
Decoding FCR’s Gilmartin on Beekman Tower: condo aversion may jeopardize AY condos (or 50/50 plan)
Atlantic Yards Report
When Forest City Ratner Executive VP MaryAnne Gilmartin offers some insight into another local project under construction, Norman Oder speculates that the Atlantic Yards 50/50 affordable housing deal might get even murkier:
While the Beekman Tower is less a model for Atlantic Yards housing than the under-construction tower at 80 DeKalb Avenue in Brooklyn, Gilmartin’s explanation of why Beekman contains rental units, not condos, may cast further doubt on the developer’s plans for 1930 condos in the Atlantic Yards project.
If the condo market is currently saturated, and the developer prefers the flexibility of rentals, then either the condos would be quite delayed or a switch to rentals would further undermine the pledge of 50/50 affordable and market-rate housing.
Also, while questions about Atlantic Yards just didn’t come up, Gilmartin’s assertion that “we just simply do not know how to give up” may be tested by trying to pursue Atlantic Yards during an economic downturn. Note also that she described "the development, community" as "change-resistant, by its very definition--we really only do things when we have to."
Posted by lumi at 6:10 AM
Public-Private Projects Grapple With Shifts
GlobeSt.com
By Erika Morphy
It may be a gateway destination, but DC has been affected by slowing investment sales like just about every other city. So the area was thrilled when Mayor Adrian Fenty announced that the District and Forest City Washington are forming a public-private partnership to build a $42 million waterfront park along the Anacostia River. Not only is it a new project -- but it is one that is receiving a significant boost from the local government.
Public-private real estate development has always been a complex affair, with the participants having to balance competing goals, such as job creation, profit motivation and tax payer approval, as they build the capital stack. Still, though, this give-and-take has usually been worth it for developers over the last several years as cities, flush with funds, happily invested in their local landscape. That DC, which last quarter began running a deficit, is still investing in these projects is a good sign, observers say. Forest City will begin construction on the 5.5-acre park, using $42 million Payment-in-Lieu-of-Taxes funding.
Unfortunately, though, the project may well prove to be more the exception than the rule going forward – and not just for DC, but for most cities. Simply put, these projects are suffering from twin forces: a dwindling tax base thanks to recessionary pressures, and the tight credit market.
Check out the rest of the article for a concise and comprehensive outlook on the state of public-private partnerships.
NoLandGrab: Though Forest City got the nod for the Anacostia park, the highly subsidized Atlantic Yards project, including the money-hemorrhaging NJ Nets, could sink under its own weight.
For the uninitiated, Payment in Lieu of Taxes (PILOTs) is a creative device meant to be an end-run around issuing bonds directly, which, in many municipalities and states, has to go through the messy and inefficient democratic process of voter approval.
Posted by lumi at 5:07 AM
Forest City in the News
CoStar Group, Forest City Buys Bldg. at Antelope Valley Mall for $12M
Forest City Enterprises acquired the Gottschalks building at the Antelope Valley Mall in Palmdale, CA. Gottschalks Inc. sold the property for $12 million, or about $114 per square foot.
Press release, via PR Newswire, Forest City Celebrates Grand Opening of The Shops at Wiregrass
Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today celebrated the grand opening of The Shops at Wiregrass, a 646,000-square-foot open-air, regional lifestyle center in Wesley Chapel, Fla., near Tampa.
...
"The Shops at Wiregrass will be a regional draw for the New Tampa area, becoming a true gathering place for the growing population of Pasco County," said Charles A. Ratner, Forest City president and chief executive officer. "Along with great anchors and restaurants, it is opening with 81 percent of small-shop space committed, and with 78 percent already signed to leases, demonstrating strong retailer support for this project, even in uncertain economic times.""This marks the Company's second successful retail opening in October, joining The Shops at White Oak Village near Richmond, Va., which opened earlier this month at nearly 90 percent leased," Ratner added.
Posted by lumi at 4:46 AM
October 30, 2008
FCR's Gilmartin: "Every deal dies three times"
Atlantic Yards Report
Before everyone proclaims, "Atlantic Yards est mort," Norman Oder brings you these words of wisdom from Bruce Ratner's de facto project manager, MaryAnne Gilmartin:
Consider an observation by MaryAnne Gilmartin, the FCR executive who replaced Stuckey on Atlantic Yards, speaking Monday night at the Center for Architecture: "“This is a notable quotable from me, but ‘every deal dies three times.'”
She said it in recounting the saga of the Frank Gehry-designed Beekman Tower in Lower Manhattan.
Posted by lumi at 5:16 AM
Forest City in the News
The Associated Press, via WashingtonPost.com, District Announces Plan for $42M Anacostia Park
The District of Columbia has reached an agreement with a developer to build a $42 million park along the Anacostia River.
The 5.5-acre park in southeast Washington will be constructed blocks away from the Washington Nationals' baseball stadium. The project is part of The Yards, a 42-acre development that will include offices, apartments and 400,000 square feet of retail space and restaurants.
...
The developer, Forest City Washington, says the park is expected to be completed by spring 2010. D.C. has provided money for construction by selling a bond against future taxes that will be generated by neighboring development.
The Tampa Tribune, Shops At Wiregrass Ready For Action
A profile of Greg Lenners, The Shops at Wiregrass mall manager:
For the past decade, Lenners, 42, has worked his way up Forest City's management ladder to become the head of Wiregrass, the company's newest mall, which opens to the public at 10 a.m. today at State Road 56 and Bruce B. Downs Boulevard.
...
Having opened six malls as part of Forest City's opening-day strike team, Lenners was the calm center amid the hustle and bustle surrounding him. The mall should open with 75 percent of its stores ready, he said as crews hung awnings and laid pavers.Lenners acknowledged managing an open-air mall in Florida - where torrential rainfall is possible half the year - could be different from his years in arid southern California.
St. Petersburg Times, Pasco mall developers ask: Downturn? What downturn?
Who woulda thunk that "the controversial $4-billion Atlantic Yards project in Brooklyn, N.Y." would get a mention in an article about the opening of a mall "regional lifestyle center" in Tampa? The irony is that Forest City took special pains to plant mature trees, while they were cutting them down in Brooklyn.
At 10 a.m. today the $156-million Shops at Wiregrass opens at the epicenter of the local homebuilding collapse and the worst retailing climate in decades.
"Economies go up and down all the time, so we build for the long term," said Jim Richardson, East Coast retail development boss for Forest City Enterprises Corp., which built Wiregrass in a joint venture with Goodman Co. of West Palm Beach. "But if we tap into the pent up demand we saw here last weekend, this project will turn out wonderfully."
...
The Shops at Wiregrass was built to double as a downtown for a 5,000-acre residential community with 16,000 homes, condos and apartments. The project is laid out in a nostalgia-laden crescent like a Main Street lined with parking meters and a town square. Parking garages shorten the walk and protect against the elements. Forest City bought mature trees to make the place look like it has been there for a decade.
...
Cleveland-based Forest City, which boasts a $10-billion real estate portfolio, has one of the nation's most ambitious commercial development pipelines. Wiregrass is the company's fifth similar project to open this year. It is also building the controversial $4-billion Atlantic Yards project in Brooklyn, N.Y.
Posted by lumi at 4:23 AM
October 29, 2008
Forest City in the News
Tampa Bay Oline, Optimistic, New Mall To Open
The Shops at Wiregrass couldn't have found itself with a gloomier time for a grand debut.
The new mall is opening with a likely global recession in the works and many people finding that their retirement accounts are down 30 percent or more this month.
...
The owners of the Shops at Wire- grass mall, its 72 retailers and hundreds of newly-hired store employees are betting that shoppers in this part of the Tampa Bay area are so hungry for a new mall that even a beaten-down economy won't keep them - and their money - away.
...
Like most new malls, Shops at Wiregrass is an open-air "lifestyle center," instead of an indoor mall. It aims to re-create a downtown shopping district. Mall owners Forest City Enterprises of Cleveland and the Goodman Co. of West Palm Beach arranged the 90 small mall stores in 12 separate buildings and laid them out in a semicircular pattern.
CNewsPubs.com, Q&A: We have answers to your Shops at Wiregrass questions
Q. Why is The Shops at Wiregrass not enclosed like some other area malls?
A. The configuration of The Shops at Wiregrass — it is an open-air, regional lifestyle center — lends itself perfectly to shopping as well as community activities, Lenners said. The Shops at Wiregrass will offer people the sheer experience of spending time in a park- like environment while shopping in a setting resembling a downtown-shopping district. ...
Q. How much did it cost to build The Shops at Wiregrass?A. It cost $156 million. The Shops at Wiregrass is a joint effort of Forest City Enterprises Inc. and The Goodman Company.
Posted by lumi at 5:04 AM
October 26, 2008
New York's Center for Architecture Marks 5th Anniversary with Architecture Week Events
Artdaily.org
This week Forest City Ratner Executive VP MaryAnne Gilmartin is a luminary and honoree:
NEW YORK, NY.- This month, New York City's Center for Architecture celebrates its 5th anniversary, coinciding with its participation in the citywide celebration Architecture Week. Through October 31, the Center will host parties, screenings, and talks by such luminaries as architects Nina and Daniel Libeskind from Studio Daniel Libeskind, Forest City Ratner's MaryAnne Gilmartin, HPD Deputy Commissioner Holly Leicht, and Henry Myerberg, moderating a discussion of the Robin Hood Foundation's library initiative.
The receptions and lectures culminate in the 2008 Heritage Ball, the prestigious annual gala, taking place on October 30 at Chelsea Piers. Honorees include the Robin Hood Foundation, MaryAnne Gilmartin, HPD Commissioner Shaun Donovan, Hon. AIA, and Studio Daniel Libeskind.
Posted by lumi at 1:53 PM
Ratner Parent Company Stock Slides on Concerns over Brooklyn
NetsDaily
Forest City Enterprises, the Nets’ single largest stockholder at 23%, saw its own stock crumble this week, with one rating agency dropping its credit rating even after the IRS agreed to permit tax-free financing for the Nets new arena. Standard & Poor’s, noting FCE has already sunk $250 million into Bruce Ratner’s Atlantic Yards–and the Nets, said it was “particularly concerned” about the project’s viability.
As usual, there's a raging debate over the significance of this news in the comments section (link).
Posted by lumi at 1:03 PM
October 25, 2008
Forest City Downgraded; Analysts "Particularly Concerned" About Atlantic Yards
The New York Observer
by Eliot Brown
Another item noting Standard & Poor's downgrade of Forest City Enterprises' credit rating.
Standard & Poor's yesterday downgraded the credit rating of mega-developer Forest City Enterprises, the parent company of Forest City Ratner, the developer of the planned Atlantic Yards project in Brooklyn. The downgrade came as the credit markets have made the financing of new development near impossible, and Forest City, based in Cleveland and with projects in numerous regions, is no exception.
Posted by steve at 8:41 AM
Gringcorp Comments on Atlantic Yards Report
Atlantic Yards Report
Grincorp, also know as Gumby Fresh, responded to a post on Atlantic Yards Report concerning Standard & Poor's downgrade of Forest City Enterprises' credit rating:
The rating action was dated October 23rd, so the exemption may have been factored in. To be honest, though, while losing the tax exemption might have depressed FCE's return on the arena deal, the agencies are probably more concerned about the deal happening at all, right now, which suggests a little nervousness at the amount of spending that has gone into AY already.
Posted by steve at 8:27 AM
October 24, 2008
As Forest City's stock price drops another 40%, rating agency expresses concern, including about AY
Atlantic Yards Report
Norman Oder follows up on Standard & Poor's downgrade of Forest City debt.
Less than two weeks ago, Forest City Enterprises (FCE), parent company of Atlantic Yards developer Forest City Ratner, saw its stock price close at $19.79, less than a dollar over the low point of its 52-week range. (Five-year chart at right from Oct. 11 post.)
...Now the stock has declined nearly 40%, to $11.91--note that the lowest level of the chart at right, as opposed to the one at top, is $10.
At the same time, rating company Standard & Poor's has cut Forest City's credit rating, citing "concerns about Forest City's debt load and the company's ambitious development plans in a weak economy," according to the Cleveland Plain Dealer.
"Standard & Poor's analysts expressed concern about projects including Forest City's high-profile and controversial Atlantic Yards development in Brooklyn," the newspaper noted. The AP added, "S&P lowered Forest City's corporate credit rating and its rating on senior unsecured notes further into junk, or non-investment grade, status."
NoLandGrab: Click here for a current Forest City Enterprises stock quote.
Cleveland Plain Dealer, Forest City reassures investors after ratings cut
Forest City Enterprises said it can manage its debt and increase its liquidity after Standard & Poor's Rating Services cut the company's credit ratings.
The real estate developer, based in Cleveland, released a statement Thursday after Standard & Poor's reduced ratings on Forest City's corporate credit and senior unsecured notes.The ratings agency lowered its ratings based on concerns about Forest City's debt load and the company's ambitious development plans in a weak economy.
Posted by eric at 11:12 AM
Forest City's debt rating cut
The Associated Press, via Forbes.com, Forest City: Company solid despite ratings cut
Forest City Enterprises Inc. sought to reassure investors Thursday that it can manage its debt maturities and liquidity position even after Standard & Poor's Rating Services cut the real estate developer's credit ratings.
S&P lowered Forest City's corporate credit rating and its rating on senior unsecured notes further into junk, or non-investment grade, status.
"We interpret this action in light of the macroeconomic factors impacting nearly every sector of the economy, including real estate," said Forest City President and Chief Executive Charles Ratner. "We believe Forest City and its management team are fully capable of navigating the current environment."
Ratner also said the company has access to nonrecourse financing to fund its development projects.
Shares closed earlier down $1.63, or 12 percent, at $11.91.
Full press release after the jump.
NoLandGrab: Investment analysts wouldn't characterize the NJ Nets, which is burning a mega-million-dollar hole in Forest City's balance sheet, as one of the "macroeconomic factors impacting nearly every sector of the economy."
Forest City Comments on Standard & Poor's Rating Action
CLEVELAND, OH UNITED STATES
CLEVELAND, Oct. 23 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) commented today on action taken by Standard & Poor's Rating Services (S&P). S&P lowered its corporate credit rating for Forest City to BB from BB+, and lowered its rating on the Company's senior unsecured notes to B+ from BB-. In response, Forest City President and Chief Executive Officer Charles A. Ratner issued the following statement:
"We interpret this action in light of the macroeconomic factors impacting nearly every sector of the economy, including real estate. These are clearly difficult times, given the condition of capital and credit markets. Nevertheless, we believe Forest City and its management team are fully capable of navigating the current environment. We have already taken a number of steps to enhance liquidity and we continue to effectively manage debt maturities for the balance of 2008 and 2009. We have also demonstrated repeatedly in recent months that we continue to have access to non-recourse financing to fund our development pipeline projects.
"Forest City has weathered many downturns and real estate cycles over 80-plus years in business and more than four decades as a public company. Our skilled, long-tenured management team has a track record of performance and demonstrated ability to consistently create value, even in challenging times. We have responded to current market and industry conditions with prudent, assertive actions that put us in a strong position for the future.
"Further, we still believe that current conditions create opportunity for Forest City, given market dislocations, and we intend to selectively and strategically take advantage of such opportunities. We are confident that over time, we will return to the growth path that has characterized Forest City for decades."
About Forest City
Forest City Enterprises, Inc. is a $10.9 billion NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States.
Safe Harbor Language
Statements made in this news release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The Company's actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, general real estate development and investment risks including lack of satisfactory financing, construction and lease-up delays and cost overruns, dependence on rental income from real property, reliance on major tenants, the effect of economic and market conditions on a nationwide basis as well as in our primary markets, vacancies in our properties, downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, department store consolidations, international activities, the impact of terrorist acts, risks associated with an investment in and operation of a professional sports team, conflicts of interests, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our credit facility, the level and volatility of interest rates, the continued availability of tax-exempt government financing, effects of uninsured or underinsured losses, environmental liabilities, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, changes in market conditions, litigation risks, and other risk factors as disclosed from time to time in the Company's SEC filings, including but not limited to, the Company's annual and quarterly reports.
SOURCE Forest City Enterprises, Inc.
Related links:
http://www.forestcity.net
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20080515/FRSTCTYLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Robert O'Brien, Executive Vice President,
Chief Financial Officer; Thomas Kmiecik, Assistant Treasurer; or
Jeff Linton, Vice President, Corporate Communication, all of
Forest City Enterprises, Inc., +1-216-621-6060
Posted by lumi at 6:47 AM
October 23, 2008
Forest City in the News
While Forest City's stalled Atlantic Yards megaproject has become the poster project of hubristic urban pseudo-planning, taxpayer-funded boondoggles, eminent domain abuse, etc., other divisions of the Cleveland-based development company are planning ribbon-cutting ceremonies and receiving accolades:
New Mexico Business Weekly, Mesa del Sol wins international honor
Mesa del Sol received an award for technology-based economic development this week from the International Economic Development Council. The council’s awards recognize excellence in the economic development profession.
The group lauded developer Forest City Covington as “trendsetting.” It singled out what it called a unique element in the project’s master plan: the design and development of an economic base ahead of housing.
Oakland Tribune, Forest City's Uptown will help revitalize Oakland's downtown
Now, the final and perhaps most difficult pieces of [Downtown Oakland] revitalization are falling into place with the grand opening Thursday of Forest City's 665-unit Uptown Apartments in the fledgling entertainment district on a triangular wedge of downtown north of the Fox Theatre.
Collectively known as the Uptown Apartments, the buildings blanket much of the area around 19th Street, Thomas Berkley Way (formerly 20th Street), and Telegraph and San Pablo avenues.
The project is a public-private partnership between Forest City and MacFarlane Partners, and the city of Oakland Redevelopment Agency. The agency assembled the land and gave Ohio-based Forest City a financial subsidy of $54.4 million, which includes land costs.
NoLandGrab: In all fairness, it sounds like some controversial decision-making and neighborhood-razing preceded the ground breaking of the Downtown Oakland project.
Posted by lumi at 5:38 AM
October 22, 2008
Tax-Exempt Bonds: The Evening Wrap
Here's the rundown on today's coverage of the IRS's decision to tighten a "loophole" on the use of PILOTs to finance arenas and stadia — only the Yankees, Mets and, maybe, the Nets, have slipped the knot.
Gothamist, Atlantic Yards Project Gets Big Bond Break from IRS
These New York teams may be hard-pressed to find investors who will buy the bonds, given the current Wall Street turbulence. Not so incidentally, the ruling comes four days before Yankees president Randy Levine and city officials are expected to testify at a Congressional hearing investigating the tax-exempt financing of the new $1.3 billion Yankee Stadium. Representative Dennis Kucinich, who is holding the hearing Friday, has threatened to prosecute officials if they lied about the value of the land the new stadium occupies.
State Assemblyman Richard Brodsky, a Westchester Democrat, slammed the IRS decision, telling the Times and the AP, "This is the same kind of socialism for the rich, and capitalism for the rest of us that’s gotten us into the current economic mess...The rules don't apply if you've got enough juice."
Curbed, Atlantic Yards Crap Tossing V.3.5: Financing Edition
The IRS issued a ruling yesterday that has monstrously huge implications for anyone that will ever want to build a stadium or arena ever again (don't go to sleep yet...this is big). You wouldn't know it in NYC, though, because even though it impacts the new Yankee Stadium and Citi Field, it's playing out as an Atlantic Yards story. At issue is whether tax-free financing can be used to build Frank Gehry's $950 million arena. (Leaving aside the issue as to anyone will ever finance a facility that is sure to go above $1 billion given traditional Gehry cost overruns in the middle of one of the most massive credit meltdowns in history.) The ruling creates a loophole for projects that are "substantially in progress," while banning it for new ones.
The Angry New Yorker, Tax Free Stadiums
Hey if I want to build myself a new house, think I can get me some tax free bonds to pay for it?
Brownstoner, Treasury Dept. Hooks Up Ratner Big-Time
One potential snag for FCR: The new regs require that the bonds be issued by December 31, 2009.
Gowanus Lounge, So, Does Mr. Ratner Get Tax-Free Bonds for Atlantic Yards?
The key phrase is that it grandfathers in projects “substantially in progress.” We can see lawyers and bureaucrats arguing this point about Atlantic Yards until we live in Green-Wood Cemetery.
Be sure to check out Gowanus Lounge's reflections on the ethics of subsidizing arenas.
Develop Don't Destroy Brooklyn, Ratner Spokesman Vs. Treasury Department Spokesman on IRS Regulation
Bloomberg News, New York Yankees, Mets Get Approval for Tax-Exempt Bond Funding
Village Voice [Runnin' Scared blog], Atlantic Yards Gets Tax Break, Or Not
The Times spoke to Daniel Goldstein of DDDB, who "said it appeared to him that federal tax officials went out of their way to help the developer," the paper writes, "which he said 'makes no sense' when the federal government is in the midst of a costly bailout of the banking industry." Actually it does make sense: the bailout is an attempt by the powerful to restore a failed, obviously unsustainable confidence scheme to viability; this tax break (if it is a tax break), ditto.
Posted by eric at 9:18 PM
October 21, 2008
TODAY: Barclays, Nets and Forest City Ratner unveil new playground
From the Bergen Record reporter Al Iannazzone's blog, "In the 'Zzone":
The Barclays/Nets Community Alliance and Forest City Ratner will unveil a new playground at Public School 19 in the Williamsburg section of Brooklyn tomorrow at 11 a.m. It's the first of eight Brooklyn playgrounds that will be funded in part by Barclays/Nets Alliance.
Posted by lumi at 6:18 AM
Forest City / Goodman Company Opening Shops at Wiregrass Next Week
The Co-Star Group
Forest City Commercial, together with The Goodman Company is on track to celebrate the grand opening of The Shops at Wiregrass on Oct. 30, 2008. The 800,000-square-foot open-air lifestyle center is located at SR 56 and Bruce B Downs Boulevard in Wesley Chapel, FL -- a suburb of Tampa.
NoLandGrab: This is the second Forest City Mall to open in as many months.
Posted by lumi at 5:55 AM
October 16, 2008
Forest City in the News
MarketWatch, PRESS RELEASE: Forest City Celebrates Grand Opening of The Shops at White Oak Village
Buried in this press release about the opening of a Forest City mall in Virginia is some developer pillow talk:
"The Shops at White Oak Village will serve an attractive and underserved market in eastern Henrico County and offers a unique combination of power center and lifestyle center sensibilities," said Charles A. Ratner, Forest City president and chief executive officer.
CoStar Group, Forest City's The Shoppes at White Oak Village Now Open
Here are some interesting details about the White Oak Village mall:
The center is a redevelopment project. The 136-acre site was once home to a Viasystems manufacturing plan. Throughout the construction process, Forest City said 77,000 tons of concrete were crushed on site and re-used for foundations, sidewalks, and structural support for The Shops at White Oak Village and added that 7,500 tons of aluminum, steel, iron, copper, and other ferrous and non-ferrous metals were also recycled.
Anchors tenants include Circuit City, JC Penney, Lowe's, Sam's Club and Ukrop's. Restaurants include Red Lobster, Longhorn Steakhouse, Qdoba Mexican Grill, McDonald's, TGI Friday's, Tropical Smoothie, Firehouse Subs, Cracker Barrel, Chick-Fil-A, and Red 88 Buffet. Other tenants include 7-Eleven, Anna's Linens, Ashley Stewart, AT&T, Bath & Body Works, DEB Shops, Diamond Expressions, Dots, Downtown Locker Room, dressbarn, Five Below, Floor to Ceiling, Freemans, GameStop, Great Clips, Kay Jewelers, Lee Spa Nails, Lim's Menswear, Mattress Warehouse, OfficeMax, Payless ShoeSource, Pure Vision 20/20, Rack Room Shoes, Rainbow, Shoe City, Sports Zone, T-Mobile, and Wachovia.
CoStar Group, Will New Initiative to Develop Zero-Net Energy Buildings End Before it Even Begins?
Tough economic times might put the kibbosh on the Department of Energy's Zero-Net Energy Commercial Building Initiative, even before the public-private initiative has a chance to really get started.
The real estate companies involved in the program are CB Richard Ellis, Forest City Enterprises, Hines, InterContinental Hotels Group, The Opus Group, ProLogis, Regency Centers, Ryan Companies US, Simon Property Group, Tishman Speyer and The Westfield Group.
Pittsburgh Post-Gazette, Hooters closes at Station Square to make room for sports bar
After nearly 16 years at Station Square, Hooters restaurant has closed its doors.
The restaurant shut down Sunday after Station Square owner, Forest City Enterprises, exercised an option to terminate the lease.
Forest City plans to replace Hooters with Field House, a sports bar. Tom Schneck II, a Forest City spokesman at Station Square, said Field House will open next year, but did not have an exact date.
Posted by lumi at 5:17 AM
Self-Congratulation “Befalls” a Man Who Would Know No Limits
Noticing New York noticed that Forest City Ratner was a "Major Contributor" to The Waterfalls, the tree-killing public art project to which "Mayor Bloomberg awarded the city’s Doris C. Freedman Award..." for its contribution “to the public environment."
Posted by lumi at 5:10 AM
October 13, 2008
Forest City in the News: Openings
WTVR.com, PRESS RELEASE: Discover The Shops at White Oak Village October 13
Henrico County, VA (September 30, 2008) - Residents of Henrico County will be treated to a special gift this Columbus Day when The Shops at White Oak Village officially opens, Monday, October 13 at 10 a.m. In a ceremony set on the anniversary of Christopher Columbus' arrival to America, Forest City Enterprises and Pruitt Associates will cut the ribbon and open the Center in patriotic red, white and blue style.
"This will be the beginning of a new era in Eastern Henrico," said Brendan Fisher, associate project developer, Forest City Commercial Development. "Forest City and Pruitt Associates are thrilled to bring Henrico residents a new world of shopping and dining to explore in their own community. It is with great pride that we open The Shops at White Oak Village."
MartketWatch.com, PRESS RELEASE: Forest City Military Communities Opens First New Privatized Homes for Navy Families
MILLINGTON, Tenn., Oct 03, 2008 /PRNewswire via COMTEX/ -- Together with the United States Navy, Forest City Military Communities, LLC, today welcomed local officials and community leaders to celebrate the completion of the first new privatized homes for navy families at Mid-South.
"These new homes create much needed places for our nation's sailors to live," said Forest City Military Communities' Michael Defferding. "Our partnership with the United States Navy has enabled us to bring the best of private sector business practices to our military and greatly improve the quality of life for some of the most deserving families in America. Their contribution to our nation during these times of difficulty is a true inspiration to us all."
Posted by lumi at 5:32 AM
October 12, 2008
Another distortion in the latest "liar flier"
Atlantic Yards Report notices that the buildings in the flier renderings got a bit of a haircut...
At right is a spread from the flier emphasizing the provision of affordable housing and the project's "eco-friendly nature."The rendering is long on foreground, short on background. Project towers--some of them planned to be 30, 40, and 50 stories, are cut off, with only half-a-dozen floors visible.
The main image of the project is... trees.
Posted by amy at 9:56 AM
October 11, 2008
Forest City's tanking stock price; an impact on AY?
Atlantic Yards Report
Most people who have money in the stock market are taking a hit, so it's no surprise that Forest City Enterprises (FCE), parent company of Atlantic Yards developer Forest City Ratner, is also suffering big-time.Still, its decline is pretty dramatic: it closed yesterday at $19.79, near the low point of its 52-week range: $18.84 - $60.36. (Five-year chart at right, from October 2003, two months before the project was announced.)
AY impact?
What does that mean to the company? Well, a month ago, even before the market tanked, President and CEO Chuck Ratner told investment analysts, "To a great degree, our pipeline gives us the ability to pull back on slow projects as markets weaken or, if the outlook improves, to move projects at a faster pace. Clearly, from everything that we see, this is a time to pull back and that’s exactly what we’ve done."
Posted by amy at 9:39 AM
October 10, 2008
Brooklyn BP Defends Donations From Atlantic Yards Developer
NY1
Markowitz defended the donations, saying that he has always been a proponent of this project and these contributions had no affect on his support.
"Make no mistake, I advocated for this project with no strings attached, no promise of any reciprocal support whatsoever," he said in a statement. "And I continue to do so adamantly because it will be a major catalyst for continuing what we call the 'Brooklyn Renaissance.'"
article
NoLandGrab: You say "Brooklyn Renaissance," we say "conflict of interest." Let's call the whole thing off!
And remember, when you point a finger, there are three fingers pointing right back at you.
More coverage...
Atlantic Yards Report, Post: FCR, allies funnel at least $680K to Markowitz's "pseudo campaign accounts"
NY Observer, Report: Atlantic Yards Backers Reward Markowitz Nonprofits
Develop Don't Destroy Brooklyn, Mega-bucks for Markowitz, Mega-project for Ratner
Posted by eric at 1:20 PM
BEEP REAPING BIG AS YARDS BACKER
ARENA-PLAN GROUPS BOO$T HIS PROJECTS
NY Post
by Rich Calder and Chuck Bennett
All this time, we thought Marty Markowitz was all-in on Atlantic Yards because he missed the Dodgers so much. Wrong!
Being the biggest booster of Brooklyn's controversial Atlantic Yards project has really paid off for Borough President Marty Markowitz.
Since 2003, Nets owner Bruce Ratner and others involved in the $4 billion plan for an NBA arena and 16 apartment and office towers in the heart of Brooklyn have quietly funneled at least $680,000 to three nonprofit groups set up by Markowitz to run pet projects, a Post investigation found.
The pet projects -- which include promoting tourism and offering free concerts -- have been instrumental in boosting Markowitz's popularity and getting him re-elected, critics charge.
"Affiliated nonprofits should not be used as pseudo campaign accounts," said Dick Dadey, of the government watchdog group Citizens Union. "One could argue that these nonprofits raise the profile of the borough president in a way that certainly aids his possible campaigns."
Posted by eric at 1:06 PM
October 9, 2008
Flanders Investment & Trade Comes to New York Times Bldg.
FCRC Inks Lease Transaction Valued at $7.5M
CoStar News
by Christina Mckinnon
The Government of Flanders' Investment & Trade Office signed a 7,400-square-foot lease with Forest City Ratner Cos. (FCRC) at the New York Times Building. The 10-year deal is valued at approximately $7.5 million. Occupancy is scheduled for February next year.
The 52-story, 1.5 million-square-foot office skyscraper at 620 Eighth Ave. was developed by FCRC and delivered late last year. At 748 feet, the tower ties the Chrysler Building as the third tallest building in New York.
Posted by eric at 10:08 AM
October 7, 2008
It came from the Blogosphere...
Runnin' Scared [Village Voice blog], Times: Luxury Boxes Selling OK. (Also Selling on Craigslist.)
Of course some people are sub-leasing luxury box seats at Craigslist, so far on their terms only ("Offers below face value [$115/ticket] will not be replied to"). We'll see if their price moves in the months ahead. If things get hairy, maybe the Stadia will let us roll in our own keg.
Nets Daily, Zo’s Take on His Time With Nets Revealing but Incomplete
In his autobiograpy, “Resilence: Faith, Focus, Triumph”, Alonzo Mourning writes briefly about his time–actually two times–in New Jersey, first after his diagnosis with kidney disease, then after his kidney surgery. Although Mourning paints a negative portrait of the Nets management, and particularly Bruce Ratner, he does not repeat his claim that Rod Thorn and Lawrence Frank had tried to kill him by playing him too many minutes after his transplant.
Nets Daily, Luxury Suites Still Selling, but Delays Hurting Nets
Omnivore, Brooklyn, arenas, Tampa Rays Baseball & The Future…
Blogger Ron Bronson believes the Nets will never call Brooklyn home... but that baseball's Tampa Bay Rays will.
But you better believe that the deal will get done and the ghosts of ol’ Ebbets Field will be stirred up again as a new baseball stadium gets put in the same spot where Bruce RATner thought he could put a basketball arena for a team that’s been largely irrelevant since its inception.
Where will the Nets go?
Newark, where they should’ve been all along.
NoLandGrab: Not even Frank Gehry could figure out how to shoehorn a baseball stadium onto a parcel that's not really even large enough for an arena.
New York Real Estate Journal, Special Olympics to honor Minieri of FCRC and Moudis of Ted Moudis
Posted by eric at 1:08 PM
October 3, 2008
Parole scare!
The Brooklyn Paper
By Sarah Portlock
After Bruce Ratner leased space in his MetroTech complex to a Federal parole office, parents of students of St. Ann's, another Ratner MetroTech tenant, were assured that things like this would never happen:
Since July, the private school has shared space with a federal parole office in the Bruce Ratner-owned One Pierrepont Plaza building — and parents have continued to express concern that parolees and their kids should not be mingling so closely.
Those fears were realized on Sept. 23, when an ex-con, who was wanted in a separate assault case, showed up for his scheduled parole appointment only to find two plainclothes officers waiting for him.
The felon, sensing the sting, raced out of the building with two officers in hot pursuit. A third officer briefly reached into his jacket — possibly to pull his service pistol, though the gun was never out in the open, a witness said.
Posted by lumi at 5:46 AM
Forest City in the News
Fresno Bee, Fresno projects feel the credit crunch
Off topic: News that the credit "crunch" has reached full-blown "crisis" hasn't reached headline writers in Fresno. "Crunch" was the word folks used in early 2008 when they were eager to believe that the credit market would clear its throat and recover within a few months.
Back to Forest City news: The Bee reports that projects are grinding to a halt due to the credit crisis, though Forest City's South Stadium project is not among them, since it has yet to receive formal approval, pending environmental review.
CoStar Group, Forest City Lines Up Construction Financing for DC Project
During this credit crisis, if you're a developer who managed to line up credit for your next project, you're gonna let people know:
Forest City Enterprises Inc. closed on $250 million in construction financing for the initial phase of its Waterfront Station project in Southwest Washington, DC.
Institutions participating in the financing included Bank of New York Mellon, which will serve as administrative agent for the lenders, Bank of Ireland, Wachovia, PB Capital and Landesbank Baden-Wurttemberg, New York Branch.
Posted by lumi at 5:18 AM
October 2, 2008
Are You There God? It's Us, Cleveland
Cleveland Scene
By James Renner
Over and over again, Forest City Enterprises's blatant backroom dealing demonstrates that the company is untouchable and that no one of any importance or power really cares when the tax payers get ripped off.
Here's more proof from the company's hometown of Cleveland:
Last week, we learned that the Northeast Ohio Regional Sewer Board paid Sunrise Development $1.55 million for some contaminated land that the company had purchased for $200,000.
[Ka-ching!]
Sunrise apparently is a subsidiary that Forest City uses to buy up toxic properties to sell to politicians who owe Miller favors for the thousands he injects into their campaign treasuries. Sunrise also purchased the property where the new juvenile courthouse is being built for $383,000 and sold it back to taxpayers a year later for $2.75 million. (Jimmy Dimora, who has collected tens of thousands of dollars from Miller and the Ratner family, was instrumental in that deal.)
[Ka-ching, KA-CHING!]
Posted by lumi at 4:31 AM
October 1, 2008
Forest City in the News
Fresno Bee, Two buildings, sign get historic status
The Fresno City Council did what the NYC Landmarks Preservation Commission was unwilling to do, protect historic buildings within a designated redevelopment zone to be developed by Forest City Ratner.
Two downtown Fresno buildings and a sign on a third building were given historic designations Tuesday by the Fresno City Council, in at least one case over the objections of the property owner.
...
The review was necessary, said City Attorney James Sanchez, because all of the buildings fall within Forest City Enterprises' South Stadium project area. City officials hope the South Stadium project will transform that corner of downtown.
...
Susan Smartt, a senior vice president with Forest City, said the historic designations would affect her company's plans, but it was too soon to say how drastic the changes would be.
ITBusinessEdge, DOE Doles out $15 Million for Green Building Initiative
Wherever there's a dole, Forest City is on it:
It’s not a bailout, but the U.S. Department of Energy is providing $15 million in technical assistance to 21 organizations as part of its Net-Zero Energy Commercial Building Initiative.
GreenerBuildings reports the chosen firms include Best Buy, JCPenney, John Deere, Macy’s, SuperValu, Target, Toyota, Whole Foods Market, CB Richard Ellis, Forest City Enterprises, Hines, Intercontinental Hotels Group, the Opus Group, ProLogis, Regency Centers, Ryan Companies US, Simon Property Group, Tishman Speyer, the Westfield Group, Bank of America and the PNC Financial Services Group.
Posted by lumi at 5:52 AM
September 30, 2008
AMID CRISIS, DEALS KEEP COMING
NY Post
Columnist Steve Cuozzo's inventory list of "just-done [real estate] deals that give hope it isn't the end of the world" includes Bruce Ratner's Times Tower:
The Government of Flanders, which represents Belgians in that region, and technology outfit Autonomy Inc. signed for a total of 13,000 square feet on floors owned by Bruce Ratner at the New York Times tower.
Posted by lumi at 5:51 AM
Forest City in the News
Westchester.com, Report On Westchester Multi-Housing Market
A report on condos and apartments in Westchester indicates that the market is still strong due to a low vacancy rate. More inventory is slated to come to market with two large-scale projects in the pipeline:
Significant projects (100+ units) that are under construction include Avalon Bay White Plains that will consist of 417 rental apartments; and Forest City Ratner Companies’ (FCRC), Ridge Hill Village in Yonkers, a mixed-use project featuring 1.3 million sq. ft. of retail space, 160,000 sq. ft. of office and research facilities, and a hotel and conference center. Ridge Hill’s residential component will comprise up to 1,000 apartments, of which 200 will be for over-55 active adults and 135 will be affordable.
Dallas Morning News [City Hall Blog], Cluster of downtown Dallas buildings slated for new redevelopment plan
A portion of Forest City Enterprises's project in Downtown Dallas has stalled, but the city has a Plan B:
...City Hall gave the buildings to Cleveland-based developer Forest City Enterprises as part of redevelopment plan -- subsidized by about $70 million in public money -- centering on the conversion of the long-vacant Mercantile Bank Building into apartments and retail space. Forest City agreed to begin redeveloping them into more than 200 apartments, or face a series of $250,000 penalties payable to the city government.
Today, the four Atmos buildings remain empty with no redevelopment plan in motion. But that could soon change with a potential change in building ownership.
See, Forest City has already forked over one $250,000 penalty payment to City Hall with the prospect of more looming. After three such penalties, Forest City would by contract forfeit the buildings -- and Dallas City Hall would again become their owner.
Posted by lumi at 5:36 AM
September 29, 2008
Atlantic Yards Faces Another Delay
City Room [NY Times Blog]
by Charles Bagli
The developer of the ambitious Atlantic Yards arena and residential complex in Brooklyn said Monday that the project could be delayed for another six months after a state appellate court failed to dismiss a court challenge brought by opponents of the $4 billion project.
Earlier this month, the developer Bruce C. Ratner vowed that he would break ground in December on the long delayed project, where he plans to build an office tower, 15 apartment buildings and a basketball arena for the Nets.
The developer has fended off a number of lawsuits brought by critics of the project over the past two years. He and state officials had expected that the state Appellate Court would also dismiss the latest suit, which sought to block the state from using eminent domain to seize private property for Mr. Ratner’s project.
Instead, the court denied a motion to dismiss the suit, opening the door for oral arguments in the case next spring.
NoLandGrab: Ratner and the Empire State Development Corporation rolled the dice, and they crapped out. If they hadn't gambled on a dismissal, they could have moved the case along much more quickly. Is it possible that deteriorating conditions in the lending market forced them into making a bad bet?
More coverage...
TheDeal.com, Barclays deals with Lehman staff, plans to hire 1,500 more
Off the beaten track, Barclays gave a shout-out to Brooklyn, saying it remains committed to a proposed basketball arena at the Atlantic Yards despite an unfavorable court ruling on the $950 million project.
Runnin' Scared [Village Voice blog] Setback for Atlantic Yards: Motion to Dismiss Denied
The Stop Shopping Monitor, Major setback for Atlantic Yards
Newark Star-Ledger, Nets' move to Brooklyn may face further delay
The Knickerblogger, Ratner Suffers Setback, the Conspiracy Theory Version
Posted by eric at 5:48 PM
Atlantic Yards Groundbreaking on Pause for 6 Months
Eminent domain lawsuit allowed to go forward
WNYC Radio
by Matthew Schuerman
While the plaintiffs lost a similar case in federal court, the state proceedings will delay the project right as a recession is threatening.
The project's developer, Forest City Ratner, had announced that a groundbreaking on the Barclays Center basketball arena would take place by the end of this year.
But a ground can't be broken before the project secures financing, and the financing won't come before all litigation is resolved. In an official statement today, the developer, Forest City Ratner, says it is confident it will build the arena.
Posted by eric at 4:39 PM
Barclays committed to Brooklyn arena
Court setback imperils Atlantic Yards ground breaking but bank statement is a boost.
Crain's NY Business
by Matthew Sollars
Barclays Bank says it is committed to the planned basketball arena at the Atlantic Yards project despite a court setback which imperils a planned ground breaking.
A state Appellate Court panel Monday rejected a plea by the state’s Empire State Development Corp. and Forest City Ratner to dismiss a lawsuit alleging the use of eminent domain violates the state constitution. A group of 9 property owners and tenants opposed to the project filed the state suit after a similar lawsuit arguing eminent domain violated the U.S. Constitution was rejected by the U.S. Supreme Court in June.
...“While the Appellate Division Second Department’s decision to hear the case may delay the project for approximately six months let me be clear that the project will go forward,” Mr. Ratner said, in a statement.
The developer also stressed that the project could boost the city during an economic downturn. "Atlantic Yards will be built and it will create thousands of needed jobs and affordable homes," he said.
Barclays Bank has agreed to pay an estimated $20 million per year for the naming rights to the proposed arena, and is believed to have a clause which allows it to back out the deal if construction on the arena is not started by the end of November.
“We look forward to breaking ground with our partners in Brooklyn,” said a Barclays spokesman.
NoLandGrab: Talk is cheap. Let's see what Barclays does when the end of November comes around — will they be donning hard hats and wielding silver shovels in Prospect Heights, or mailing in their cancellation notice while trying to grapple with the increasingly grave global financial crisis?
Posted by eric at 4:23 PM
Construction convert steeled for Yards
Crain's NY Business
by Wendy Davis
Crain's, which seems to support any New York business initiative no matter how misguided it may be, has named the president of Forest City Ratner to its "New Influentials" list.
Joanne Minieri
President
Forest City Ratner Cos.
Named president of Forest City Ratner in October 2007, Joanne Minieri oversees one of the city's most ambitious and controversial projects. The $4 billion, 8 million–square–foot Atlantic Yards in Brooklyn is to include more than 6,400 apartments, retail space, a hotel and an entertainment and sports arena that will be home to the Nets basketball team.
Posted by eric at 2:00 PM
Ruling on lawsuit against Mansfield is set for Thursday
Star-Telegram
By Robert Cadwallader
Who woulda thunk that developer Forest City would be at the center of a lawsuit alleging that the company benefited from backroom dealings, involving a questionable land deal and tax incentives?
Sure, that kind of stuff goes on all the time in Cleveland and Brooklyn, but check out what's going on in Mansfield, TX, just outside of Ft. Worth.
A judge could rule Thursday on a lawsuit saying the city held illegal secret meetings, conducted questionable land deals and offered questionable tax incentives related to The Shops at Broad Street retail center.
...
The city and one-time City Council candidate Valerie Mantos are set to square off in a summary judgment hearing before Judge Bonnie Sudderth of the 352nd State District Court in Fort Worth. The city is asking Sudderth to rule in its favor without a trial.However, last week Mantos filed an amended petition that expanded its complaints about how the city provided the 105-acre site and incentives for the planned 1.2 million-square-foot retail complex.
Read the rest of the article to hear some familiar themes.
Posted by lumi at 5:10 AM
September 27, 2008
Escaped Parolee a Game-Changer for Saint Ann's Stance
Brownstoner
Another episode in the saga of Saint Ann's school, Forest City Ratner and the development company's newest tenant, a Federal Probation Office:
"We believe that as long as the school and its neighbors are doing everything they can to ensure student safety, there is a limit to the extent to which the school can or should appropriately try to influence, block or change the environment and facilities in which Saint Ann’s has always chosen to locate itself," wrote the headmaster and board president at the time. Just two weeks into the school year, however, a 32-year-old parolee who'd already done 12 years in jail on drug-related charges, bolted from an interrogation room at 147 Pierrepont Street at 2:50 in the afternoon, ten minutes before school let out. Two armed officers pursued him on the street, where one parent reported seeing one of the officers reach for his gun before thinking better of it. On top of that, it's come to light that 53 sex offenders (six of whom are pedophiles) have been visiting the parole office, contrary to assurances initially given the school administration. Needless to say, the school administration has now changed its tune and will be asking a Federal judge to relocate the probation office to the courts.
Posted by amy at 11:24 AM
September 25, 2008
Forest City in the News
TradingMarkets.com, Forest City Enterprises Declares 8 Cent Dividend
September 24, 2008 (FinancialWire) -- Forest City Enterprises, Inc.'s (NYSE: FCE) (Current Market Cap: US$3.24 Bil.) board has declared a cash dividend of $0.08 for each outstanding share of both class A and class B common stock.
Cleveland Plain Dealer, Forest City closes on financing for D.C. project
Forest City Enterprises Inc. has closed on $250 million in construction financing for the initial phase of a project in southwest Washington, D.C.
The Cleveland-based real estate company has secured financing for the first two buildings of Waterfront Station, a mixed-use redevelopment project on M Street Southwest and Fourth Street near a rail station. The first two buildings comprise 628,000 square feet of offices and retail. The office space is fully leased to the District of Columbia for government offices. The retail tenants will include a Safeway supermarket and a CVS pharmacy.
Forest City executives said the financing deal is a testament to the project's strength in tough times. The $10.9 billion company continues to make announcements about financing deals and developments, though Forest City has pulled back on some projects and is taking a more cautious stance amid financial turmoil and a tight lending market.
Construction financing for the Waterfront Station project involved the Bank of Ireland, Wachovia Corp., PB Capital Corp. and the New York branch of Landesbank Baden-Wurttemberg. Bank of New York Mellon will serve as the administrative agent for the lenders.
Washington Business Journal, Forest City lands $250M for Southwest project
“Closing this nonrecourse financing in the midst of current credit-market conditions is a testament to a strong project in an excellent location, as well as to Forest City’s sponsorship, its partners and a great group of lenders,” said Charles A. Ratner, president and chief executive officer of Forest City (NYSE:FCEA) (NYSE:FCEB).
It’s also indicative of the creative approaches developers are taking to get the money to build projects. While the construction financing market was once dominated by regional and local banks, developers are increasingly turning to sovereign wealth funds, foreign banks and syndication arrangements with pools of participating banks.
...
The project is being developed by Waterfront Associates, a joint venture between affiliates of Forest City Washington Inc., Bresler & Reiner Inc. and Vornado/Charles E. Smith.
GlobeSt.com, $250M Finances Waterfront Station
Cleveland Scene, Conventional Wisdom
Despite the fact that siting Cleveland's new convention center behind Tower City flies in the face of the logistical needs of those who actually run and service conventions and trade shows, there's one reason that the site selection committee might have chosen the land owned by Forest City over the site where the current convention center is located:
OFFICIALLY, THERE ARE two sites in play: land behind Tower City, on the Cuyahoga River, occupied mainly by parking lots; and the current, city-owned convention center, under Malls B and C downtown. Both were evaluated by the Greater Cleveland Partnership, a coalition of major area businesses.
In August, the GCP's 13-member site-selection committee, formed at the county commissioners' behest, released a report explaining the pros and cons of both locations (available online at www.positivelycleveland.com/mediacenter/conventioncenter). The committee also announced that it had voted unanimously in favor of the Tower City location, which is owned by Forest City, whose board chairman, Sam Miller, is a contributor to many campaigns and arguably the most powerful non-elected person in Cleveland.
Posted by lumi at 4:55 AM
September 24, 2008
Forest City in the News
MarketWatch, Forest City Closes on $250 Million in Financing for Waterfront Project in Southwest D.C.
From a Forest City press release:
Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) announced today that it has closed on $250 million in construction financing for the initial phase of its Waterfront Station project in Southwest Washington, D.C.
Waterfront Station, on M Street SW at 4th Street, is a mixed-use redevelopment that will include office, residential and retail components. The site is adjacent to the Waterfront/Southeastern University MetroRail station.
The financing includes the project's first two buildings, totaling 628,000 square feet of office and ground-level retail space. The office component is fully leased to the District of Columbia for various governmental offices, and the retail component will include a Safeway supermarket, a CVS pharmacy, and other retail tenants.
NoLandGrab: Note that the office space is leased by the government. Fun fact: The City of NY is the largest tenant in MetroTech and the State of NY is the largest tenant in the Atlantic Center Mall.
The Eagle-Tribune in Massachusetts reported earlier this week that, "[Forest City] is a family-owned and family-run company that cooperates with local officials." It also works the other way around.
The Eagle-Tribune, Wall Street's woes are hitting home on Main Street.
Ironically it was the Eagle-Trib that reported on Monday that an official from the City of Haverhill "said he expects Lawrence officials will be happy with the way Forest City operates." Now that Forest City is putting the brakes on the Lawrence project, due to the credit crisis, Lawrence officials are probably not that happy.
Forest City Enterprises, a national development company based in Cleveland, Ohio, had planned to convert the Newark Paper property along the Merrimack in Lawrence into a 291-unit apartment complex. That plan is now on hold.
"The credit markets are not so wonderful," David Levey, executive vice president at Forest City Enterprises, told Kirk. "There is no financing for anything right now. It's very serious.