No Land Grab

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Additional coverage...

The Wall Street Journal, Forest City Enterprises Loss Narrows, But Company Cautious

The owner of commercial and residential properties reported a loss of $4.4 million, or 3 cents a share, for the quarter ended Oct. 31, compared with a year-earlier loss of $19.1 million, or 19 cents a share. On a continuing basis, the company swung to earnings of 1 cent a share from a loss of 15 cents.

Total revenue fell 7.3% to $306.1 million.

Analysts polled by Thomson Reuters projected a loss of 1 cent a share on revenue of $351 million.

Cleveland Plain Dealer, Losses narrow, EBDT up at Forest City Enterprises in the third quarter

Forest City, based in Cleveland, expects the rest of this year and 2010 to be challenging for the real estate industry, which has been battered by the recession, falling property values and a pullback on lending.
...

The company announced quarterly earnings after markets closed today. Shares of Forest City's stock (NYSE: FCE-A) closed trading today at $11.50, down 45 cents or 3.8 percent.

Posted by eric at 9:59 PM

PRESS RELEASE: Forest City Reports Fiscal 2009 Third-Quarter and Year-to-Date Results

CLEVELAND, Dec. 8 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB), today announced EBDT, net earnings and revenues for the three and nine months ended October 31, 2009.

EBDT

Third-quarter EBDT (earnings before depreciation, amortization and deferred taxes) was $85.6 million, a 94.0 percent increase compared with 2008 third-quarter EBDT of $44.1 million. Year-to-date EBDT was $222.7 million, a 50.0 percent increase compared with $148.4 million for the first nine months of fiscal 2008.

On a per share basis, third-quarter 2009 EBDT was $0.52, a 23.8 percent increase compared with 2008 third quarter EBDT of $0.42. Year-to-date per share EBDT was $1.59, a 14.4 percent increase compared with $1.39 per share for the first nine months of 2008. Per-share data for both the third quarter and nine months of 2009 reflect the dilutive effect of new Class A common shares issued by the Company during the second quarter of 2009, and the "if-converted" effect of two convertible debt transactions executed during the third quarter.

For an explanation of EBDT variances, see the section titled "Review of Results" in this news release. EBDT and EBDT per share are non-Generally Accepted Accounting Principle (GAAP) measures. A reconciliation of net earnings (the most directly comparable GAAP measure to EBDT) to EBDT is provided in the Financial Highlights table in this news release.

Net Loss

The third-quarter net loss attributable to Forest City Enterprises, Inc. was $4.4 million, or $0.03 per share, compared with a net loss of $19.1 million, or $0.19 per share, in the third quarter of 2008. Net loss for the nine months ended October 31, 2009, was $36.9 million, or $0.27 per share, compared with $67.9 million, or $0.66 per share for the same period in 2008. In addition to the items discussed below that impacted EBDT and net loss, the net loss was also negatively impacted by increased impairment charges of $14.4 million for the third quarter (primarily related to the write-down of certain land holdings and to the impairment, prior to sale, of two assisted-living residential properties) and $25.4 million for the first nine months of 2009.

Revenues

Third-quarter 2009 consolidated revenues were $306.1 million compared with $330.4 million last year. Revenues for the nine months ended October 31, 2009, were $932.9 million compared with $960.0 million for the comparable period in 2008. The year-over-year revenue variance was impacted primarily by lower land sales and by reduced construction and development fee income from military housing, as early development phases were completed.

Liquidity

"For more than a year now, nearly every major action we've taken as a Company has been focused on improving liquidity and strengthening our balance sheet," said Charles A Ratner, Forest City president and chief executive officer. "Today, liquidity remains our highest priority. Since the beginning of the third quarter, we have executed a successful private debt exchange, issued and closed a new convertible debt offering, and reached agreement with our bank group on the principal terms of a new, two-year $500 million credit facility. These achievements, together with the equity offering we executed in the second quarter, have contributed to significantly increasing liquidity and managing near-term debt maturities."

Click through for more detail than anybody (except Norman Oder) would care to know.

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Posted by eric at 9:49 PM

99 Cent robbery

The Brooklyn Paper, Police Blotter
by Sabrina Jaszi

Et tu, Bruce Ratner? If the presence of crime is a strong indicator of blight, your mall is guilty as charged.

Department steal

A thief ripped off a woman at the Marshall’s department store on Dec. 3.

The victim was shopping inside the discounter inside the Atlantic Center Mall at around 4:30 pm when the sneak took her purse off her cart while her back was turned. He got away with credit cards and a Blackberry.

Immature four

Four teenage thugs did more than pick on a younger teen after school on Dec. 4.

The 14-year-old victim said he was walking to the Atlantic Center Mall mall at around 3:40 pm, but when he was at the corner of Ashland and Hanson places, the older kids walked up and grabbed his digital musical player.

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Related coverage...

The Local [Fort Greene/Clinton Hill], The Week in Crime: Stay Alert

The Local wants a cut of the action, too.

12/5: Woman, 19, reports Old Navy clutch with $17 stolen on the escalator at Atlantic Mall.

Posted by eric at 8:30 AM

December 7, 2009

Tomb of the Unknown Ratner, or a sneak peek at the future Barclays Center security perimeter?

NoLandGrab

For seemingly as long as some people can remember, what will be the main street-level entrance to the Long Island Railroad's Flatbush Avenue terminal has been under construction, and, more often than not, hidden behind scaffolding. Not long ago, however, the scaffolding came down, revealing a curved, windowed façade, framed in pale stone and fronting an atrium.

Then, more recently, some scaffolding went back up, and crews began some work on the small plaza at the corner of Atlantic Avenue and Hanson Place. In the past few days, the nature of this work was revealed: a closely spaced series of enormous, intrusive, Sarcophagus-like — and butt-ugly — blocks.

Our first thought was that the Brooklyn Museum was preparing an outdoor installation from its Egyptian collection, or that perhaps Green-Wood Cemetery had finally reached capacity. But then reality intruded, and we realized that we were looking at the Atlantic Terminal's new security perimeter — and perhaps, a test run for perimeter security at Bruce Ratner's planned Barclays Center basketball arena.

When several elected officials in November, 2007 called for an independent review of security plans for the arena, after Newark police required the closing of a busy street adjacent to that city's Prudential Center before and during events (and after Forest City Ratner misled journalists about the proximity of the arena to Flatbush and Atlantic Avenues), they were rebuffed by Forest City and city and state officials, and police spokesman John Kelly pointedly told the Brooklyn Daily Eagle that the NYPD didn't "foresee any street or land closures, sidewalk widening around the arena or the installation of bollards [emphasis, ours].

OK, but what about massive concrete and granite boxes the size of small cars, likely to frustrate pedestrians as much, or more, than terrorists?

If the MTA and Forest City believe it's necessary to place Gaza-sized security outside the Flatbush Avenue terminal, which is occupied by perhaps a couple thousand people in transit at any one time, what might they have planned for the space surrounding the Barclays Center, which, assuming significant improvement in the play of the Nets, would hold 18,000+ seated patrons for two or three hours at a time?

As the photo below (taken by Michael D.D. White) of the model of the latest iteration of the Barclays Center indicates, the arena would nearly overhang Atlantic Avenue (at right in photo; that's Sixth Avenue in the foreground). Would the sidewalk along Atlantic be lined with barriers similar to the ones being installed at the Atlantic Terminal? Would other "publicly accessible" space be cordoned in the same manner?

It's also worth noting that while NYPD spokesman Kelly didn't foresee the installation of bollards, the Barclays Center Arena Preliminary Official Statement anticipates the installation of "sidewalks, bollards and street trees" in the main entry plaza, or, as Bruce Ratner likes to call it, the "Urban Experience" outside the arena. So which is it?

The public has a right to know how allegedly public space will be configured. An independent security review need not reveal blast resistance and composition of materials, but it should certainly reveal whether or not sidewalks will be able to handle the flow of crowds, and, crucially, whether or not traffic would be restricted in any way. Because protecting a 21st century arena shouldn't depend on technology from Egypt's Fourth Dynasty. When Bruce Ratner promised "world-class design," we didn't think he meant the world circa 2500 B.C.

Posted by eric at 10:06 AM

December 2, 2009

Forest City Enterprises Notice of Third-Quarter 2009 Earnings and Conference Call

PR Newswire

Forest City Enterprises, Inc., (NYSE: FCEA and FCEB) will release its third-quarter 2009 financial results on Tuesday, December 8, 2009, after the NYSE close, and will hold a conference call with investors on Thursday, December 10, 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, Thursday, December 10, 2009. A live webcast of the call will be available online at www.forestcity.net.

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, go to:

https://www.theconferencingservice.com/prereg/key.process?key=PF4CEXKHN

To participate on the day of the call, dial 888-680-0860 and use access code 68778777, approximately five minutes before the call. Callers without a pre-registration PIN can press *1 to bypass the instructions and speak to a live operator. Tell the operator you wish to join the Forest City Third-Quarter Earnings Conference Call. (International callers, please dial 617-213-4852)

The call will be replayed from December 10, 2009, 2:00 P.M. ET to January 10, 2010, 11:59 P.M. ET. The replay number is 888-286-8010, access code 43038561. (International callers, please dial 617-801-6888) The webcast replay will be available at www.forestcity.net .

Posted by eric at 5:04 PM

Unfair Substitution of Fiction For Fact in the Atlantic Yards Dialogue

Noticing New York

A prevailing hallmark of the promotion for Forest City Ratner’s proposed Atlantic Yards Brooklyn real estate mega-monopoly is the extremely unfair way that fiction has been routinely substituted for and intermingled with what are theoretically the actual facts. Not only have the fictions enlisted to support this abusive eminent domain taking been patently false factwise; they have for the most part not even been believable.

Things That Are Not True About Atlantic Yards

One supreme work of fiction in the mix has been the AKRF “blight” study. With high-end condominiums recently developed and built within and immediately outside of the megadevelopment’s footprint it is clear that there was no blight. Another unfortunate way that the intrusion of fiction has been amplified is that for the Court of Appeals decision its official “record” of non-facts was closed as of late 2006 by which choice the court ignored all sorts of conspicuous subsequent events that contradicted the fictions on the record.

Here is a list of other significant fictions that Forest City Ratner and the state officials servicing that firm have unfairly intruded into the public discussion. The list is not exhaustive. To make it so would be a difficult challenge.

Click through for the lengthy list of fictions, and for a very interesting tale of overheard dialogue at the meeting approving the issuance of tax-exempt bonds for Baron Bruce's basketball barn.

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Also...

Atlantic Yards Report, AY facts and fiction, from Noticing New York

Some of the fictions are more debatable than others--after all, the Atlantic Yards site likely would have an arena, thus different from the infamous site in New London.

But White and other critics/opponents have a lot of ammo, starting with incontrovertible deceptions like the crime analysis in the Blight Study.

Posted by eric at 9:53 AM

November 24, 2009

FOREST CITY RATNER PRESS RELEASE: FCRC Statement on NYS Court of Appeals Ruling on Eminent Domain Lawsuit Filed by Opponents of Atlantic Yards in Brooklyn

Courts Again Side with Atlantic Yards: Jobs and Affordable Housing to Come to Brooklyn

BROOKLYN, NY—Bruce Ratner, CEO and Chairman of Forest City Ratner Companies, issued the following statement today regarding the NYS Court of Appeals ruling in favor of the Atlantic Yards project in Brooklyn.

The Court's ruling upholds the State’s right to use eminent domain given the public benefits associated with the Atlantic Yards Development in Brooklyn.

“Once again the courts have made it clear that this project represents a significant public benefit for the people of Brooklyn and the entire City,” Mr. Ratner said. “Our commitment to the entire project is as strong today as when we started six years ago. Today, however, this project is even more important given the need for jobs and economic development.”

Mr. Ratner said construction activity on the yards will continue, with the intent that the Nets will play ball in the Barclays Center in the 2011-2012 NBA Season.

In addition to Barclays, which has the exclusive naming rights, eight companies have signed on as founding partners for the arena.

The courts have ruled consistently in favor of the development. Mr. Ratner explained as well that the arena and larger development are expected to create 16,924 union construction jobs and over 8,000 permanent jobs. The tax revenues that will be generated for the City and State during the construction period are expected to exceed $240 million and after construction reach approximately $70 million a year.

NoLandGrab: 8,000 permanent jobs?! That number is only inflated about three times over from the latest plan, and without the proposed office tower — Ratner himself asked a Crain's reporter a few weeks ago "can you tell me when we are going to need a new office tower?" — the true number is likely fewer than 1,000.

Posted by eric at 2:50 PM

November 23, 2009

On Forest City Ratner's monopolies and "the next great site in Brooklyn"

Atlantic Yards Report

To Michael White's very interesting Noticing New York piece on Forest City Ratner's efforts to corner a monopoly on prime Brooklyn land, let me remind readers that Chuck Ratner, CEO of parent Forest City Enterprises, on 9/9/05 told investment analysts:

"I will confess that it was less than two or three years ago we were sitting around in New York wondering where the next deals were going to come from. We had finished a whole bunch of office and we completed MetroTech and we didn't have the next great site in Brooklyn. That was one of the reasons we got so aggressive and creative, Bruce and his team did in this Atlantic Yards project. We saw that land sitting there for this last 10 years, realizing it would be a great opportunity if somebody could turn it on."

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Posted by eric at 9:24 AM

November 19, 2009

Manhattan Awash with Stalled Construction Sites

DNAinfo
By Nicole Bode and Serena Solomon

Manhattan is awash in stalled or delayed construction sites. Some are frozen by the downturn, or hobbling along with the help of reduced union labor costs. Others drag on, bolstered by city programs, in the hope that better economic times will return soon.
...
DNAinfo compiled a list of the top 10 sites around the borough where dismal financial conditions have hampered development or halted it entirely.
...
One site that signed up for the plan was developer Bruce Ratner's Beekman Tower in the Municipal District, a Frank Gehry-designed apartment building that almost lopped off the top 36 floors of the planned 76-story building when financing evaporated earlier this year.

Thanks to the labor savings, the project is now working overtime to reach its full height by the time it is slated to open in 2011.

The project landed on DNAinfo's list because it was forced to shut down for three months this spring while Ratner tried to drum up additional funding. The opening day for a new public school housed on the building's lower floors was pushed back from this fall to next fall, The Real Deal reported. A spokeswoman for the developer says the building's topping-off ceremony is on track for this Thursday.

Still, the agreement between developers and laborers doesn't address the newly-stringent regulations by banks who are demanding more collateral up front from developers than ever before.

And some experts predict the temporary activity created by reduced labor costs will bottom out once the projects are complete — leaving the next round of developers on their own.

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Posted by lumi at 6:23 AM

Forest City in the News

The first two news items underscore the deep ties between Forest City Enterprises and local governments: the development company is about the hit the jackpot in Vegas, but common sense regains consciousness in Texas.

Las Vegas Sun, New city hall bonds have given project stimulating effect

Federal stimulus funds are slated to bail out a major Forest City Enterprises project in Las Vegas.

The Star-Telegram, Too many loose ends doom deal to put school auditorium at shopping center

The Mansfield, TX, Board of Ed rejected the city's plan to build an auditorium as part of a Forest City Enterprises mall project, choosing instead to build it next to a local vocational school.

The 5-1 vote, which came shortly before midnight, ended two months of closed-door discussions on a deal give the 5,500-seat center a more prominent site — at The Shops at Broad Street, a 1.2 million-square-foot retail complex planned for U.S. 287 and East Broad.
...
City officials and the developer, Forest City, hoped the auditorium would help jump-start The Shops’ planning and development, which stalled during the recession.

CoStar Group, Forest City Promotes Ratner to President of Forest City West

Brian Jones, chairman of west coast development for Cleveland-based developer, Forest City Enterprises, is retiring from the company. In his place, Kevin Ratner, Forest City's current president of residential west, has been named as president of Forest City West.

Posted by lumi at 5:58 AM

November 18, 2009

Man on man crime

The Brooklyn Paper, Police Blotter
by Stephen Brown

The scene of this crime can't be pinned downed definitively, but it's noteworthy that the Brooklyn Paper is now referring to Bruce Ratner's emporium as the "notorious Atlantic Terminal Mall."

The Atlantic Yards blight study went out of its way to frame the project footprint as the hotbed of local crime activity, but the reality is that most area skullduggery is emanating from the Atlantic Terminal and its Ratner-owned neighbor, the Atlantic Center.

Target-ed

A Fourth Avenue woman had her wallet swiped off her baby stroller during a shopping expedition that started in the notorious Atlantic Terminal Mall on Oct. 30, cops said.

The woman, who, as fate would have it, works for the district attorney’s office, did not notice the crime for several days — until she checked her account and discovered that someone had made more than $1,000 in charges on her cards.

The thief might have taken the wallet off the stroller at Target, Party City, a nearby Key Food or the Associated Supermarket on Fifth Avenue — all stops on the 38-year-old victim’s itinerary that fateful day.

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Posted by eric at 9:56 AM

November 14, 2009

Follow-up on Violence From Ratner Mall

The ESDC's blight study used to justify eminent domain for the proposed Atlantic Yards project claimed a high crime rate for the area, but most of it occurs in Bruce Ratner's malls adjacent to the site. A promotional event gone out of control this past week served to emphasize this point.

The Local - Buffalo Wings Exec: ‘It Was the Perfect Storm’

The Buffalo Wild Wings restaurant at the Atlantic Terminal mall had been trying for three weeks to address growing crowds of kids coming out for the Tuesday night 50-cent wings special, a top executive said in a telephone interview today.

But a confluence of forces — the restaurant’s location in a major transportation hub, the ability of social networking to rally people, and the interest of a large number of kids wanting to gather on the night before a school holiday — all combined to set the stage for the violence that broke out later that night in nearby Fort Greene, he said.

The Brooklyn Paper - Shooting ends chicken wing gravy train at Buffalo Wild Wings
By Stephen Brown

Buffalo Wild Wings has plucked the feathers off its weekly cheap wings promotion after hordes of rowdy students descended on the sports bar, resulting in two separate shooting incidents on Tuesday night.

The three teens caught in the crossfire were not seriously injured, but that did not stop some local leaders from calling for a crackdown on the spicy appetizer emporium inside the Atlantic Terminal Mall.

Councilwoman Letitia James (D–Fort Greene) pointed the finger at the management of the sports bar for recklessly promoting its 50-cent “Wing Tuesdays” to students.

“I want this Tuesday restaurant promotion stopped, or the lease of this business revoked,” James said.

Posted by steve at 6:56 AM

Costco Comes to Manhattan

GlobeSt.com
By Paul Bubny

This Forest City project is nearing completion. Fans of the developer will immediately recognize promises of low-wage jobs via big box stores coupled with government subsidies in order to reproduce a suburban shopping mall in New York City.

A 110,000-square-foot Costco opened its doors Thursday as the first tenant to set up shop at the East River Plaza in East Harlem. It’s the first Manhattan location for the warehouse club and the culmination of a 13-year process to develop the 500,000-square-foot retail center.

...

"Given the tough economic times we face, East River Plaza offers a much-needed boost to the economy of New York City," says Bruce Ratner, chairman and CEO of FCRC, in a release. "East River Plaza brings jobs for local residents and generates tax revenue for the city and state. It also provides Manhattan's residents and small businesses with access to quality merchandise at wholesale prices."

Ratner says the project is more than 90% leased, and will generate approximately 2,000 permanent jobs when fully occupied. The Costco has about 400 employees, mostly from northern Manhattan.

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NoLandGrab: We'd love to know who will be checking to see how many of those "approximately 2,000 jobs" materialze?

Posted by steve at 5:50 AM

November 12, 2009

First tenant at East River Plaza opens its doors

The Real Deal

Here's one Forest City Ratner project that has actually come to fruition.

East Harlem's new big-box retail shopping center, East River Plaza, officially opened today on FDR Drive, according to a press release. The 500,000-square-foot center, developed through a partnership between Forest City Ratner Companies and the Blumenfeld Development group, will include a Target, Best Buy, Marshalls, PetSmart and Old Navy. Costco, which occupies a little over a fifth of the plaza's total space, is the first tenant to open, bringing 400 new jobs to the area. Leasing at the center largely has been considered a success; according to developer Bruce Ratner, 90 percent of the retail space has been leased out. All told, the East River Plaza will create an estimated 2,000 jobs.

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Posted by eric at 9:47 PM

November 10, 2009

Ripping the roof

The Brooklyn Paper, Police Blotter
by Sabrina Jaszi

Bruce Ratner may want to think about tightening up security in his two Fort Greene malls; with crime running rampant, he could run the risk of their being deemed blighted, and then they could be seized under New York State's liberal eminent domain laws.

Pursenapper

A shopping center prowler lifted a woman’s purse from the stroller that she was pushing through the Atlantic Terminal Mall on Nov. 4.

The victim was ready to spend at around 6 pm, but she stepped away from her stroller for just a moment, and when she returned, the handbag, which contained a Blackberry, was gone.

Luckily the baby was still there.

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Posted by eric at 11:42 AM

November 6, 2009

Forest City goes one for two with Gehry

The Real Deal
by C.J. Hughes

For the megadeveloper Forest City Ratner Companies, the last few months can be seen as a tale of two projects.

The worst of times seems to have taken hold at Atlantic Yards, the proposed 22-acre development of apartments, offices and a basketball arena in Brooklyn. In June, Forest City dumped architect Frank Gehry, whose eye-catching designs helped generate much of the project's initial excitement.

And last month, the Empire State Development Corporation, the state authority backing the project, had to face the state's Court of Appeals in a case about the legality of its eminent-domain actions after being sued by a community group.

But in Manhattan, after a rocky start, it seems to be the best of times -- or at least somewhat more favorable ones, for Beekman Tower at 8 Spruce Street in the Financial District.

The 76-story rental tower will be the tallest residential building in New York. Unlike at Atlantic Yards, Gehry's design (his first residential project in New York) is getting built, despite its stumbles.

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Posted by eric at 11:30 AM

Forest City in the News

Reuters, Forest City Community Development Entity Receives $55 Million in Tax Credit Allocation to Stimulate Investment in Low-Income Communities
From the press release touting what amounts to a federal bailout of Forest City Enterprises:

The allocation of $55 million will go toward providing financing for real estate development projects located in specific distressed and low-income communities. This is the third time FCCDE has received an NMTC allocation, for a total of $151 million in allocations under the program.

NoLandGrab: With the company going through hard times, the "allocation" comes just in time.

The NMTC program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making equity investments in designated community development entities, like FCCDE. The investor receives a credit, claimed over a seven-year period, totaling 39 percent of the cost of the investment. The U.S. Department of the Treasury's Community Development Financial Institutions Fund administers the NMTC program. Thirty percent of the program's $5 billion funding for the latest round of allocations came from the American Recovery and Reinvestment Act of 2009.

NLG: With all of the creative subsidies Forest City Enterprises manages to exploit, we're appalled that the company actually has to pay taxes. No wonder the company has been going through a rough patch.

ForestCity.net v2

Forest City Enterprises launches a new web site.

Posted by lumi at 4:39 AM

November 3, 2009

The Week in Crime: Choked and Robbed

The Local [Fort Greene/Clinton Hill]
by Kate Briquelet

Another day, another felony in Bruce Ratner's Atlantic Terminal mall — a major source of local crime that the Empire State Development Corporation wrongly and knowingly ascribed to the Atlantic Yards footprint to help stack the deck for "blight."

An employee at Guitar Center in the Atlantic Terminal mall reported a guitar worth $1,860 missing after conducting inventory.

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Posted by eric at 6:54 PM

Forest City in the News

The Denver Post, Greene: Stapleton developer Forest City's poor planning pits park against school

"At Stapleton, the one thing we could never have planned for was the people."

So reads Forest City's website for the mega-development where its own lack of planning (you know, for the people) has prompted tensions over whether to build a park or a school.

The company is being showered with kudos for donating $5.5 million toward a third elementary school now that two others are overcrowded. Schools and other new projects there are funded by "tax-increment financing," a source of revenue that tanked with the economy. Swarms of young families have demanded the third school they were promised by the company.

Forest City's commitment to ante up the cash has quelled some of their uproar.

Still, residents point out that the company isn't the open- handed corporate citizen headlines suggest.

The catch is that Forest City is merely reallocating funds set aside to build a planned park. So residents might get a school, but the park they've been waiting for is on hold.

NoLandGrab: No surprises here — in Brooklyn, Forest City Enterprises has never been accused of people-friendly planning.

Posted by lumi at 5:11 AM

November 2, 2009

Forest City in the News

The Cleveland Plain-Dealer, Cuyahoga County government overhaul puts focus on campaign finance reform

Referendums to study campaign finance reform are on the ballot in tomorrow's election in Cuyahoga County, where Atlantic Yards developer Forest City Enterprises are big players:

Executives at Forest City Enterprises, a powerful Cleveland developer, don't seem to mind solicitations.

Albert Ratner, the company's co-chairman, and family members contributed $10,000 to Cuyahoga County Treasurer Jim Rokakis in his last election cycle in 2008, and they gave $14,000 to Russo in his last election cycle in 2006, reports show.

Charles Ratner, president and chief executive officer, contributed $2,000 to Rokakis. Sam Miller, another co-chairman, contributed $2,000 to Russo during the same elections.

Charles Ratner said he can't speak to why his colleagues contribute, but, "I do it because I believe strongly in the American political system and I have a great respect for people who devote their life to public service."

Posted by lumi at 4:34 AM

October 30, 2009

Forest City in the News

Associated Press, Forest City refinances office buildings in Mass

Real estate company Forest City Enterprises Inc. said Thursday that it closed on a $90 million refinancing for twin office buildings in its University Park in Cambridge, Mass.

The seven-year, fixed-rate refinancing represents about a 50 percent increase in principal over the prior financing, Forest City said in a release. Jeff Linton, a company spokesman, said additional terms of the deal were not being released.

Reuters, PRESS RELEASE: Forest City Announces $90 Million Refinancing of Tech Office Buildings at Cambridge, Mass., Bioscience Park

The Cleveland Plain-Dealer, Forest City refinances two Massachusetts office buildings

The real estate company, based in Cleveland, has secured a seven-year, fixed-rate refinancing for the 45/75 Sydney Street buildings through two insurance companies. The new deal represents a 50 percent increase in principal over the prior financing for the properties.

Posted by lumi at 5:24 AM

October 28, 2009

Forest City in the News

PR Newswire, Forest City Closes Offering of $200 Million Convertible Senior Notes

From the press release issued by the parent company of Atlantic Yards developer Forest City Ratner:

Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced the closing of its offering of $200 million aggregate principal amount of convertible senior notes due 2016 (the "Notes"). This amount includes the exercise in full of the initial purchasers' option to purchase $25 million in aggregate principal amount of additional Notes to cover overallotments. Forest City received net proceeds from the offering of approximately $177.3 million, after deducting the initial purchasers' discounts, estimated offering expenses and the cost of the convertible note hedge transactions discussed below.

Retail Traffic, Forest City Issues $200M Notes

Real estate company, Forest City Enterprises, has sold $200 million of convertible senior notes, PR Newswire reports. Forest City raised net proceeds of about $177.3 million, after deducting the initial purchasers’ discounts, estimated expenses and the cost of the convertible note hedge transactions.

The notes, due 2016, were sold to qualified institutional buyers. The company is planning to use the proceeds to cut outstanding debt on its revolving $750 million credit facility and for general corporate purposes.

TradingMarkets, Forest City Enterprises raises $200 million in private placement

Forest City Enterprises, Inc., a US-based real estate company, has completed a private placement of $200 million aggregate principal amount of convertible senior notes due 2016.

Trading Markets, Forest City Enterprises Down 9.6% Since SmarTrend's Sell Recommendation

SmarTrend, our proprietary pattern recognition system, called a Downtrend for Forest City Enterprises (NYSE:FCE.A) on October 20, 2009 at $11.36.

Since then, Forest City Enterprises has returned 9.6% as of today's recent price of $10.27.

Posted by lumi at 3:11 AM

October 26, 2009

Forest City Announces Exercise of Overallotment Option by Initial Purchasers of Convertible Senior Notes

Reuters

Forest City Enterprises, the parent company of the developer of Atlantic Yards, wants everyone to know about its latest move to get its balance sheet in order:

CLEVELAND, Oct. 23 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced that the initial purchasers of the Company's recently announced offering of $175 million aggregate principal amount of convertible senior notes due 2016 (the "Notes"), have exercised in full their option to purchase an additional $25 million aggregate principal amount of the Notes to cover overallotments.

With the initial purchasers' exercise of the full overallotment option, Forest City estimates that the net proceeds from the offering will be approximately $177.3 million, after deducting the initial purchasers' discounts, estimated offering expenses and the cost of convertible note hedge transactions. Forest City expects to use the net proceeds from the offering to reduce outstanding borrowings on the Company's $750 million revolving credit facility and for general corporate purposes, which, depending on prevailing market conditions, could include the repayment of debt with earlier maturities. The closing of the offering is expected to occur on October 26, 2009.

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Posted by lumi at 6:47 AM

October 22, 2009

Newspapers Already Receive Subsidies

Reason Hit & Run
by Matt Welch

God Bless America — and subsidies!

And–never forget!–the aformentioned New York Times HQ was one of the more brazen examples you'll find of corporatism in the name of the little guy. From my 2005 column about it:

On September 24, 2001, as New York firefighters were still picking their comrades' body parts out of the World Trade Center wreckage, New York Times Co. Vice Chairman and Senior Vice President Michael Golden announced that the Gray Lady was ready to do its part in the healing.

"We believe there could not be a greater contribution," Golden told a clutch of city officials and journalists, "than to have the opportunity to start construction of the first major icon building in New York City after the tragic events of Sept. 11." Bruce Ratner, president of the real estate development company working with the Times on its proposed new Eighth Avenue headquarters, called the project a "very important testament to our values, culture and democratic ideals."

Those "values" and "democratic ideals" included using eminent domain to forcibly evict 55 businesses--including a trade school, a student housing unit, a Donna Karan outlet, and several mom-and-pop stores--against their will, under the legal cover of erasing "blight," in order to clear ground for a 52-story skyscraper. The Times and Ratner, who never bothered making an offer to the property owners, bought the Port Authority adjacent property at a steep discount ($85 million) from a state agency that seized the 11 buildings on it; should legal settlements with the original tenants exceed that amount, taxpayers will have to make up the difference. On top of that gift, the city and state offered the Times $26 million in tax breaks for the project, and Ratner even lobbied to receive $400 million worth of U.S. Treasury backed Liberty Bonds--instruments created by Congress to help rebuild Lower Manhattan. Which is four miles away.

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NoLandGrab: Given this context, it's not so surprising that word of last week's Atlantic Yards eminent domain hearing never made it into the pages of The Times.

Posted by eric at 3:46 PM

October 21, 2009

Forest City in the News

The Cleveland Plain Dealer, Forest City to offer notes, refinances and extends loans

Forest City Enterprises Inc. (NYSE: FCE-A and FCE-B) plans to offer $175 million in convertible senior notes to certain institutional buyers, generating cash for purposes such as repaying money borrowed on the company's $750 million revolving credit facility.

The real estate company said it will issue notes that can be converted into shares of Forest City's Class A common stock. The notes are due in 2016.

The company provided a progress update Monday on its efforts to reduce debt and extend or refinance existing loans. The company said it has approximately 60 percent of the necessary commitments from is 14-member bank group to renew its revolving credit facility. That facility matures in March 2010.

Forest City also announced a handful of loan extensions and refinancings, including two in Greater Cleveland.

NoLandGrab: Based on this news, one gets the sense of how highly leveraged the Atlantic Yards developer is — no wonder the Ratners have to rush into a deal with a Russian oligarch to bail out the Brooklyn project.

The NY Times, A Difficult Birth for East Harlem Mall

Even by the often sluggish standards of development in New York City, East River Plaza, the big-box vertical mall under construction along the F.D.R. Drive in East Harlem, has proceeded at a glacial pace.
...
[W]orkers are finally preparing for the Nov. 12 opening of the shopping center’s first tenant: a 110,000-square-foot Costco wholesale warehouse club, the borough’s first. Target, Best Buy and Marshall’s will start moving in next spring. Of 485,000 square feet, only 30,000 are not yet spoken for.

The opening is coming 15 years after the Blumenfeld Development Group, headed by Mr. Blumenfeld’s father, Edward, worked with Canyon Capital Realty Advisers of Beverly Hills, Calif., to buy the six-acre site, which stretches from 116th Street to 119th Street, for $3.1 million at a foreclosure auction. Five years later, the project was approved by the City Council. In 2004, Canyon Capital sold its interest to Forest City Ratner.
...
The project began to pick up speed after Forest City, a partner in the development of the headquarters building of The New York Times Company on Eighth Avenue, became involved. Having a well-connected local partner added strength to the project, Mr. Blumenfeld said.

GlenviewAnnouncements.com, Navy cancels plans for additional housing in Glenview

The U.S. Navy and its private development partner [Forest City Military Communities, LLC] have canceled three-year-old plans to build 118 new three- and four-bedroom units in Glenview for military personnel assigned to Naval Station Great Lakes, Glenview officials acknowledged Monday.

Posted by lumi at 5:33 AM

October 20, 2009

Two Boymelgreen firms threatened with bankruptcy

Problems mount for troubled developer Shaya Boymelgreen, who is alleged to be $200,000 behind in his rent at his Brooklyn headquarters, 752 Pacific St.

Crain's NY Business
by Theresa Agovino

More shenanigans at 752 Pacific Street.

A company claiming to be a tenant in Shaya Boymelgreen's American headquarters in Brooklyn filed to push two companies controlled by the embattled developer into Chapter 7 bankruptcy last week. The tenant's legal move was made to avoid being evicted along with Mr. Boymelgreen, whose firm was slated to be removed from 752 Pacific Ave. Tuesday.

The order for that eviction, in turn, came after Mr. Boymelgreen lost a legal battle with the landlord of the building, which stands within the footprint of the huge Atlantic Yards development. The landlord, Henry Weinstein, says Mr. Boymelgreen is about $200,000 behind in his rent but that he has no knowledge or record of the developer leasing space to subtenant.

Mr. Boymelgreen's tenant, 752 Pacific St. Corp., didn't want to be ousted so it filed the petition to stop the eviction process and open a dialogue with Mr. Weinstein. The two companies named in the suit once controlled the leases to 752 Pacific Ave. and a neighboring parking lot but lost them in a lawsuit with Mr. Weinstein.
...

“Boymelgreen never gave us any indication of subtenants,” Mr. Weinstein said. “We just assume this is some kind of fraud.”

Mr. Weinstein added that he is talking with authorities about moving ahead with the eviction. On Oct. 8, the Brooklyn Sheriff's office slapped a five-day eviction notice on the building, which Mr. Boymelgreen began leasing in 1999.

Mr. Weinstein said he sued Mr. Boymelgreen in 2006 after learning the developer sold his 40-year lease on the building to Forest City Ratner without Mr. Weinstein's knowledge. Forest City needs to raze the building so it can construct its project on the rail yards, which is slated to include an arena and 16 residential towers.

In May, the New York state Court of Appeals ruled that Mr. Weinstein could evict Mr. Boymelgreen and that Forest City was given illegal assignment to Mr. Weinstein's properties. Mr. Weinstein said Mr. Boymelgreen hasn't paid rent since June.

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Posted by eric at 9:47 PM

October 15, 2009

Inspector Grabit

The Brooklyn Paper, Police Blotter
by Ben Muessig

With blight at issue in yesterday's NYS Court of Appeals hearing on the Atlantic Yards eminent domain case, we should point out that a key aspect of the "blighting conditions" cited in the Empire State Development Corporation's blight study was crime in the project footprint — a claim that was proved patently untrue. The real ground zero for local crime? Bruce Ratner's Atlantic Terminal and Atlantic Center malls.

Targeted!

A crook snatched a 53-year-old woman’s credit cards while she shopped at Target at Flatbush and Atlantic avenues on Sept. 30.

In a crime that has become a regular staple of our police blotter, the thief grabbed the charge cards between 7 pm and 7:30 pm and made $136.14 of unauthorized purchases.

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Posted by eric at 10:54 AM

Forest City in the News

Dallas Morning News, Dallas City Council approves subsidy packages for Deloitte, Continental Building

Forest City just lined up more subsidies for a project in Dallas:

The Dallas City Council approved two major subsidy packages Wednesday aimed at drawing workers and residents to downtown.

A $17.5 million tax-increment subsidy was approved for Cleveland-based developer Forest City to restore the vacant and decaying Continental Building on Main Street.
...
In 2005, Forest City received $68 million in city subsidy, mainly for redevelopment of the Mercantile Building, which has since become one of downtown's largest apartment complexes.

The deal became one of the richest tax subsidy packages in Dallas' history but proved to be too little to restore both the Mercantile and the Continental as intended.

So the council returned to the subsidy table for the Continental on Wednesday, with the hope its redevelopment will bring downtown more of what it desperately needs – residents.

The $17.5 million in tax increment money – paid out over many years – will be used to help repay federal loans Forest City also needs for the deal.

NoLandGrab: Forest City Enterprises CEO Charles Ratner has already stated the developer's intention to seek more subsidies for Atlantic Yards.

Chicago Sun-Times, Mercy Medical Center: Chicago's clout hospital

Forest City was a key player in an insider land deal in Chicago involving two Chicago aldermen.

PR Web, Mall Seeking Top Trendsetters!

Just in time for the holidays, Forest City's Pittsburgh mall is drumming up some excitement with "Project: Style." The four top contestants will win a $150 gift card to the mall.

Posted by lumi at 4:33 AM

October 13, 2009

Feeling the pressure: FCR VP in April said, "I continue to be a freaked-out developer with an arena that must start this year"

Atlantic Yards Report

From an email from Forest City Ratner Sen. VP Jane Marshall to the Department of City Planning's Winston Von Engel:

"Excellent. I continue to be a freaked out developer with an arena that must start this year; I hiccup 'tech memo', 'master closing', 'amanda must like interim conditions', and to that end must discuss with you tomorrow. Thanks."

To decode Marshall's shorthand, the arena must start this year if it is to rely on tax-exempt bonds and (likely) fulfill a naming rights agreement.

Marshall may be a little less freaked out right now. But the clock is still ticking.

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NoLandGrab: It's a small comfort that the developer is feeling the pressure, when residents of the surrounding neighborhoods have been feeling the pressure of Atlantic Yards for nearly six years already.

Posted by lumi at 5:36 AM

October 12, 2009

Forest City in the News

The Dallas Morning News, Downtown Dallas redevelopment plan to cost millions more than expected

The parent company of Atlantic Yards developer Forest City Ratner is trying to renegotiate a sweetheart deal with the City of Dallas, seeking millions more dollars in tax incentives and federal housing loans to rehab a downtown office building into condos.

To redevelop the Continental, Forest City is asking City Hall to approve a $22.5 million city tax subsidy and a $7.6 million federal housing loan.

Las Vegas Review-Journal, Las Vegas could arrange city hall construction financing by year's end

The Mayor of Las Vegas is still trying to pass the complicated land-swap/new City Hall construction deal with Forest City Enterprises.

Posted by lumi at 6:01 AM

October 7, 2009

Realistic? In KPMG report, FCR's projections for condo sales prices: $1217/sf in 2015, $1369/sf in 2019

Atlantic Yards Report

More Atlantic Yards fantasy — the projected sales prices for project condos.

The Empire State Development Corporation (ESDC) has finally released the Atlantic Yards market study by KPMG, which stated, in the words of an ESDC lawyer, that it was "not unreasonable" for the 14 residential buildings (sans Site 5 and Building 1) to be absorbed in the officially announced decade.

The upshot: Forest City Ratner is counting on sales prices of $1217/sf in 2015 up to $1369/sf in 2019.

Is that realistic? Keep in mind that the Kahr report commissioned by the Council of Brooklyn Neighborhoods was skeptical of even the $850/sf (in 2006 dollars) assumed in a 2006 KPMG report. The Kahr report cast huge doubts on the official timetable.

"Modest inflation factor"?

Even though the average high sales price in the three surrounding neighborhoods is $970/sf, the new KPMG market study states that only a "modest inflation factor" would allow the expected prices to be reached:
Mindful that these prices are based on transactions that have occurred over the past 12 months during a severe recession, the value ranges for Fort Greene ($480 - $720), Park Slope ($500 - $950) and Prospect Heights ($470 - $1,225) lend support for the FCRC’s projected sale prices when a modest inflation factor is applied given these future sales prices.

Click thru for more — including the not-so-redacted sales projections.

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NoLandGrab: We hope KPMG does a better job of protecting things like clients' social security numbers, but regardless, the real story here is the Atlantic Yards project's continued reliance on pie in the sky.

Posted by eric at 4:46 PM

Still waiting for the Times and the Public Editor to notice the FCR-ACORN connection

Atlantic Yards Report

This past Sunday, as I noted, New York Times Public Editor Clark Hoyt, in his column about ACORN, passed on an opportunity to mention Forest City Ratner's bailout of the embattled organization.

Linked from his column was his blog, The Public Editor's Journal, which posted the letters referenced in the column.

The blog, unlike the column, accepts comments. I posted the comment at right. (Click to enlarge.) According to the official policy, "Comments are moderated and generally will be posted if they are on-topic and not abusive." This one was never approved.

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Atlantic Yards Report commenter "brokeland2003" posts: "Why is the Times protecting ACORN and Ratner? Your comment was clearly on topic and not abusive."

Posted by eric at 12:23 PM

October 6, 2009

Lobbying firm hosts $1000 (minimum) fundraiser for Senator Sampson at FCR's MetroTech offices

Atlantic Yards Report

Bruce Ratner makes an in-kind contribution.

Forest City Ratner offices at MetroTech are the site tonight for a fundraiser (minimum contribution: $1000) supporting Senator John Sampson, leader of the New York State Democratic Conference.

The evening is sponsored by the Albany-based lobbying firm of State & Broadway. (Click on graphics to enlarge.)

Forest City Ratner for years avoided direct political contributions, preferring to rely on lobbying. However, in January 2008, the company gave $58,420 to the Democratic Assembly Campaign Committee's Housekeeping account.

So this indirect support might be seen as a way of maintaining influence, given the need for future tax breaks and other governmental goodies for projects like Atlantic Yards.

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NoLandGrab: We guess that $1,000 a plate buys Sampson's ignorance of the rude treatment — orchestrated by Forest City operatives — heaped on his colleague, Sen. Bill Perkins, at the May 29th State Senate hearing on Atlantic Yards.

Posted by eric at 6:57 PM

Forest City Ratner's prominent place (allegedly) in Bertha Lewis's contacts list

Atlantic Yards Report

The right-wing Red State blog was leaked a list of contacts for ACORN CEO Bertha Lewis, and Forest City Ratner is notably prominent in the word cloud, which shows frequency of contacts.

States Erick Erickson:
Above is a word cloud of the associations in the Bertha Lewis contacts list we received. Some are legitimate business dealings. Forest City Ratner, for example, is both bailing out ACORN and relying on its support for its construction projects. But others are more intriguing.

The larger the name, the greater the frequency of the name appearing in the contacts list. For many years it has been speculated that SEIU and ACORN share a common foundation. This seems to suggest as much. In fact, in at least one appearance on the contacts list, an SEIU official has an ACORN email address.

FCR's prominence

Erickson focuses on ACORN's political connections, but I consider Forest City Ratner's presence just as intriguing. FCR is more prominent than any newspaper--an obvious contact for a media-savvy organization--or governmental group.

The association with FCR may be a legitimate (if highly controversial) business dealing, but it is notable how important it seems to Lewis and thus ACORN.

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Posted by eric at 11:04 AM

October 2, 2009

A Gehry Tower Rises

Beekman: The Ratner/Gehry Project That Wasn't Dropped

NY Observer
by Eliot Brown

To anyone who treks west over the Brooklyn or Manhattan bridges each morning, a quick glance to the area just south of the Municipal Building will reveal a new addition to the Lower Manhattan skyline: a skinny, tiered concrete skeleton that's rapidly climbing upward.

The apartment tower-to-be—67 stories as of Wednesday—is a high-end rental building developed by Forest City Ratner, the firm that is desperately trying to build a new Nets basketball arena and accompanying 16-tower development near Downtown Brooklyn. And it is also—as the distinct, undulating aluminum façade now rising on the building's lower half might suggest—designed by Frank Gehry, his first residential high-rise.

(Forest City, to much criticism, dropped Mr. Gehry earlier this year from the Brooklyn project after years of planning, design and salesmanship in an attempt to significantly lower costs.)

On Wednesday, we got to take a look inside the tower, simply called Beekman, where Bruce Ratner, Forest City Ratner chairman, led us up to snap some photos a few floors shy of the top.

link

The photo above is by Mr. Brown, for The Observer.

Posted by eric at 11:09 AM

October 1, 2009

Forest City in the News

CoStar Group, Village at Gulfstream Park Sets Grand Opening Date

Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) has set the grand opening date for The Village at Gulfstream Park on February 11, 2010. The 490,000-square-foot (includes 80,000 sq. ft. of office space), high-end retail and entertainment destination is currently under construction on US1, just east of I-95 in Hallandale Beach, FL. According to its website, this is the first phase of the development -- it is planned to eventually be 1 million square feet, including 1,500 residences.

The Eagle Tribune, Gov. Patrick touts Haverhill's revival during visit

Massachusett Governor Deval Patrick made an appearance at yesterday's opening ceremony for a Forest City project:

The governor's visit included the official ribbon-cutting for the Hamel Mill Lofts.

Forest City Residential Group invested $80 million to rehabilitate four buildings that housed the Hamel Leather Co. until 1974.

The state assisted the project by providing $1,447,599 in low-income housing tax credits.

"This was about partnership," Patrick said.

NoLandGrab: "Partnership" is code word for massive public subsidy.

Posted by lumi at 6:45 AM

September 30, 2009

Forest City in the News

TradingMarkets, Forest City Enterprises Up 118.2% Since SmarTrend's Buy Recommendation

If you had listened to SmarTrend's "proprietary pattern recognition system," back in January 2009, you would have been up 118.2% on the stock in the parent company of Atlantic Yards developer Forest City Ratner.

There's no mention that the stock is still way down from when it nearly hit $70 back in April 2007.

The Boston Globe, From crumbling to chic

On the once-contaminated site of a decaying shoe factory, a thriving neighborhood is growing with the opening of hundreds of chic apartments, part of a renaissance in this Merrimack River mill city, which has seen plenty of hard times.

Longtime residents like Richard Lynch never believed the crumbling brick buildings and trash-filled parking lots near downtown could be recreated as modern housing with exposed brick, wood beams, and even a cyber cafe.

Today, however, developers, residents and government officials - including Governor Deval Patrick - are scheduled to celebrate the official opening of the 305-unit, four-building Hamel Mill Lofts complex, one of several Haverhill developments spurred by state and federal incentives.
...
Forest City Residential Group, the Hamel Mill Lofts developers, calls the $80 million complex a public-private partnership, because so many state and federal incentives were used to fund the project. For instance, the development was built with the help of Massachusetts’ five-year-old “smart-growth’’ law, formally known as 40R.

Posted by lumi at 6:19 AM

September 28, 2009

Forest City in the News

Denver Post, Developer Forest City wants to donate money to build Stapleton school

With tax revenue declining, local officials are scrambling to figure out how to build another school at Forest City's Stapleton project. The Cleveland developer has pledged to, "take $5.5 million earmarked for a park and instead donate the money for a new school in the neighborhood. John Lehigh, president of Forest City Stapleton Inc., also wants to contribute the land for the future school, which the neighborhood desperately needs."

The Eagle-Tribune, Haverhill gets final $1.7 million for parking garage

The announcement that Haverhill, MA is to receive $1.7M to build a downtown parking garage will be made at, "at an event that is also to celebrate the completion of a portion of the Hamel Mills Lofts complex. That housing development is located in a series of renovated factory buildings that formerly housed the L.H. Hamel Leather Company. The state provided millions worth of historic tax credits to help Forest City Residential Group build the complex."

Posted by lumi at 4:54 AM

September 25, 2009

Forest City in the News

RealNEO, TAX REFORM SHOULD GO BEYOND CORRUPTION ISSUE

If there’s going to be an investigation of the integrity of commercial property appraisals here, we ought to also probe tax reductions awarded to downtown property owners by official County and State of Ohio agents.

County Treasurer Jim Rokakis, concerned about the validity of commercial property appraisals because of the corruption charges involving County Auditor Frank Russo, has requested a probe by state officials. Rokakis apparently doesn’t trust the values on commercial properties. Who would?

The values given properties, of course, provide the measure of the taxes property owner’s pay. The lower the value the lesser taxes are due to be paid.
...

In recent writings, I’ve been pointing out that owners at the Tower City complex and the Ritz-Carlton hotel – both controlled by Forest City Enterprises businesses – have been requesting value reductions this year as they have in past years.
...

We really need – as a community and as a state – to look not only to rigged tax valuations because of outright corruption reported in recent days but to the practice of giving wealthy interests lower and lower valuations on the properties.

NoLandGrab: The opposite of that scam is going on in Brooklyn, where assessed land values in the Atlantic Yards footprint are soaring in order to justify the Payments in Lieu of Taxes needed to pay off arena bonds.

FoxBusiness.com, Forest City Enterprises Up 99.8% Since SmarTrend's Buy Recommendation

SmarTrend, our proprietary pattern recognition system, called an Uptrend for Forest City Enterprises (NYSE:FCE.A) on July 23, 2009 at $6.42.

Since then, Forest City Enterprises has returned 99.8% as of today's recent price of $12.83.

FCE.A opened at $13.08 in NYSE trading this morning.

Brownstoner, New Website, Logo for 80 Dekalb

80 Dekalb is getting sooooooo close. With just about every window in place, the 36-story rental project from Forest City has put up its splash site. There's no pricing info yet, but you can check out the nifty new logo and motto. And how about that url! Nice 4-letter dotcom: dklb.com.

Posted by eric at 9:08 AM

September 24, 2009

Cops snuff out pre-teen crime wave

The Brooklyn Paper, Police Blotter
by Ben Muessig

The crime wave continues at Bruce Ratner's Atlantic Terminal mall — still considered crime-free by the Empire State Development Corporation.

Target is a bull’s-eye

A pickpocket snatched a 31-year-old’s pocketbook from the Target at the corner of Flatbush Avenue and Fourth Avenue on Sept. 18.

In the latest incident at the national retailer, the crook grabbed the purse — which contained the victims IDs, keys, credit card, Metrocard, cellphone, iPhone, and $102 — at around 1:45 pm somewhere between the fitting room and the shoe section.

Got Gershed

Thieves stole at least three bicycles within the confines of the 88 Precinct, committing a crime that will forever be known as “getting Gershed” in honor of The Brooklyn Paper’s bike-crazy editor, who has been a repeat victim of bicycle theft.

• A bad guy heisted a folding bike from its spot locked near the Atlantic Terminal Mall on Sept. 15.

Purse curse

A thief snatched a woman’s wallet as she exited the Atlantic Terminal Mall on Sept. 19.

The crook jostled the woman’s bag and grabbed her Gucci wallet as she left the shopping center. The thief used the victims credit cards to buy Metrocards, police reports indicated.

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NoLandGrab: With the MTA hiking fares at the same time it's offering deep discounts to Bruce Ratner, it's little surprise that purse-snatchers are buying Metrocards with stolen credit cards.

Posted by eric at 10:45 AM

September 23, 2009

Still No Place in New York for Qaddafi’s Tent

The New York Times
by Joseph Berger

This item about where Libyan leader Muammar el-Qaddafi might pitch his tent while in New York for U.N meetings could better be titled "Lies (And the Lying Liars Who Tell Them)."

New York, of course, has several arenas big enough to house a large tent. There is the old Yankee Stadium, which sits unused while the Yankees are heading for the playoffs in their new home next door. There is also a site near Downtown Brooklyn that may one day become the home of basketball’s Nets — Atlantic Yards.

Joe DePlasco, a spokesman for Forest City Ratner, the site’s developer, said Colonel Qaddafi “could do it but he’d probably be hit by a train.”

“Most of Atlantic Yards is being built over the Long Island Rail Road, which is a functioning railyard. So it would be rather precarious for a tent.”

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NoLandGrab: For crying out loud. DePlasco is so used to lying about Atlantic Yards that, even for some throw-away story that has nothing to do with the toxically controversial project, he can't help but to make the patently false claim that "most of Atlantic Yards is being built over the Long Island Rail Road."

Is this important in the context of the Qaddafi story? Not at all. But it illustrates how lying about Atlantic Yards has become habitual among project supporters. And the truth is, Ratner has created several acres of empty, rubble-strewn lots in Prospect Heights — more than enough room to pitch a tent.

More coverage...

Atlantic Yards Report, Times quotes DePlasco as saying most of AY "is being built over the Long Island Rail Road"

Posted by eric at 9:43 PM

Wiggle room for Ratner and a reason for ongoing scrutiny: expedited funding for closing and a potential tax break for five towers

Atlantic Yards Report

With the ESDC, what you see is not necessarily what you get. Norman Oder digs into the paperwork from the board meeting at which the ESDC approved the Modified General Project Plan for Atlantic Yards, and new twists keep popping up.

The memo to the Empire State Development Corporation Board of Directors on September 17 described--but didn't quite explain--why developer Forest City Ratner would get the remaining promised $40 million in state and city payments accelerated:
Expedited State funding and City funding (described above) is being requested to achieve the goal of closing on the initial phase of the Project by the end of the calendar year.

In other words, FCR needs the money because it's got cash-flow difficulties.

And, as I describe below, the lesson of the Times Square redevelopment is that continued scrutiny of the deal is required, because, even after initial passage, the deal keeps changing.

More tax relief?

There even more wiggle room in another section of the memo. The rent for the 16 non-arena development leases would be as follows:
$1 per year; provided that the tenants for Site 5, Block 1129 and portions of Pacific Street between Carlton Ave. and Vanderbilt Ave. must also pay PILOT [payments in lieu of taxes] equal to full real estate taxes unless otherwise agreed to by the City.
(Emphasis added)

Block 1129, the southeast rectangle of the project site, would include four towers, and Site 5 would include one tower. Wouldn't Forest City Ratner argue that, if the other buildings are tax-exempt--because they would be built on the currently tax-exempt MTA railyard--shouldn't the others be too? The Bloomberg administration has been accommodating, despite the mayor's claim of no more direct funding.

Note that the memo disregards Building 15, which would be built on Block 1128, east of Sixth Avenue between Dean and Pacific Streets, on land that is also not tax-exempt. Was it just an oversight or is there no plan to construct that tower any more?

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NoLandGrab: Sure, we sound like a broken record, but this is yet more evidence that a Supplemental Environmental Impact Statement is absolutely necessary — along with a never-gonna-happen real cost-benefit analysis by the ESDC.

Posted by eric at 11:03 AM

James Stuckey - Developer and Former Economic Development Official - Is New Leader of NYU Schack Institute of Real Estate

NYU School of Continuing & Professional Studies

Where are they now?

The New York University School of Continuing and Professional Studies (NYU-SCPS) today announced the appointment of James P. Stuckey as divisional dean of the NYU Schack Institute of Real Estate, the University’s home for graduate and continuing professional education and applied research in real estate, construction management, and related fields.

Throughout his 30-plus-year career as a public official and real estate executive, Stuckey has led some of the most complex and storied development in recent New York City history, including Forest City Ratner Company’s Atlantic Yards project in Brooklyn.

Click thru if you'd like to read the (no surprise) rather lengthy press release.

link

NoLandGrab: Professor Stuckey? Like a kid in a candy store.

Posted by eric at 10:50 AM

September 22, 2009

PRESS RELEASE: Barclays/Nets Community Alliance Partners with Camp Sunshine to Support Hematology and Oncology Program

Special Session Offered for families from Brooklyn, New York

CASCO, Maine—Today, Camp Sunshine announced it has received support from the Barclays/Nets Community Alliance, which includes a partnership among Barclays, the Nets and Forest City Ratner Companies. This support is enabling a special session at Casco, Maine based Camp Sunshine in October for families from Brooklyn, New York who have children afflicted with hematology and/or oncology. Camp Sunshine offers children with life-threatening illnesses and their families free camp experiences, giving the entire family the opportunity to connect and rebuild relationships strained from the pressures of the illness.

Support from the Barclays/Nets Community Alliance will fund the entire session at Camp Sunshine including transportation from Brooklyn to Maine, and back. The Alliance support is part of their commitment to investing $1 million per year in non-profits that work to improve the lives of Brooklyn-area youth through sports and other activities, including healthcare and education.

“Camp Sunshine is a great resource for families dealing with a child who has cancer. The idyllic setting on Sebago Lake is the perfect backdrop for family connections, and is the perfect venue through which we can help sick children and families from Brooklyn,” explained Gerard LaRocca, Chief Administrative Officer, Barclays Capital.

At the October 2009 Hematology and Oncology Session, 40 families are expected to attend. A number of families have signed up already, but there are still more openings. Interested families are encouraged to contact the camp at (207) 655-3800, or via their website at www.campsunshine.org.

“Support from the Barclays/Nets Community Alliance is tremendous,” said Matt Hoidal, executive director of Camp Sunshine. “An important long-term benefit of Camp is the social network, and thanks to the Alliance, Brooklyn families will be able to make connections they can take home with them, in addition to enjoying a much-needed break.”

Posted by eric at 11:29 AM

If Forest City Ratner has breached its deal with ACORN, why has ACORN maintained support?

Atlantic Yards Report

ACORN, we should remember, has stuck by Forest City Ratner even though the developer has likely breached the deal ACORN signed.

A reader points out that, in writing about public comments by the president of New York State ACORN, I left out part of the May 2005 Housing Memorandum of Understanding, agreed to "take reasonable steps to publicly support the project by, among other things, appearing with the developer before the Public Parties, community organizations, and the media."

The ACORN obligation

The preamble states:
As long as the Project will include the ACORN/ATLANTIC YARDS 50/50 Program as described in paragraph 1, ACORN agrees to take reasonable steps to publicly support the project by, among other things, appearing with the developer before the Public Parties, community organizations, and the media.

The 50/50 program

What was described in paragraph 1?
Developer shall develop fifty (50%) of the Residential Project as affordable housing in accordance with the ACORN/ATLANTIC Yards 50/50 program. Based on a projected number of units of 4,500 the affordable commitment will be 2,250 units.

However, just a week after the press conference announcing that deal, Forest City Ratner announced changes, proposing either an addition of 1500 market-rate condos while maintaining the same amount of office space, or reducing the office space and planning for 2800 condos. Now the number of proposed condos has been reduced to 1930.

As noted in Paragraph 5 of the MOU, if the number of units in the project should increase "for any reason that the Developer determines to be economically necessary," the developer and ACORN would try to follow the 50/50 program.

Have they done so? Forest City Ratner has agreed to build 600 to 1000 affordable for-sale units, not matching the announced 1930 condo units. But that agreement has never been part of documents approved by the Empire State Development Corporation.

article

Posted by eric at 11:13 AM

September 17, 2009

ESDC agrees to allow a project cut by one-third; affordable housing depends on availability of subsidies

Atlantic Yards Report

Forest City Ratner provided the bait, now the Empire State Developerment Corporation delivers the switch.

According to the Technical Memorandum issued by the Empire State Development Corporation in June, the Atlantic Yards project (residential version) was to be 7,961,000 square feet, including a 850,000 square foot arena.

However, according to board materials distributed today, the project would include a 675,000 square foot arena and "improvements containing at least Four Million Four Hundred Seventy Thousand (4,470,000) gross square feet (exclusive of the square footage of the Arena)."

That's a total of 5,145,000 square feet, or a little less than 65% of 7,961,000 square feet.

What about affordable housing?

That 4,470,000 gross square feet presumably could not include 1930 condos, 4500 units of mixed-income rentals (2250 subsidized "affordable" units), and an office tower.

What could be cut? Obviously, if the condo market and office market don't improve, they'd be cut. What about the rentals?

The proposed development agreement also includes "no less than Two Thousand Two Hundred Fifty (2,250) affordable housing units, subject to governmental authorities making available to Party B or its applicable successor or assign, after good faith review by the applicable administering agency, affordable housing subsidies consistent with then applicable programs rules and standards then generally available to developers of affordable housing units."
(Emphasis added)

In other words, the affordable housing gets built only if there are subsidies. And there's no proof, as I've written, that the ESDC has done due diligence to check whether such subsidies would be available.

article

NoLandGrab: [Still speechless].

Posted by eric at 4:11 PM

In spite of the State Funding Agreement, ESDC will now pay Ratner's "soft costs" and speed up $25 million

Atlantic Yards Report

Norman Oder has a scoop, and here it is, in full.

In testimony today before the board of the Empire State Development Corporation (ESDC), project supporter John Holt of the Carpenters Union said, "[Developer Bruce] Ratner's not asking you for a handout. He's asking for a hand in partnership."

Well, that partnership has just gotten a little easier for Forest City Ratner, given that the developer will get $25 million in state money faster and can use the funds for purposes previously disallowed in funding agreements signed in September 2007.

Statement at meeting

ESDC Senior Counsel Steve Matlin said, "We are requesting authorization to amend, as necessary, the city and state funding agreements. Pursuant to board authorization, ESDC entered into a funding agreement with a Forest City affiliate in 2005 to provide up to $100 million in funding for infrastructure improvements. Approximately $75 million has been disbursed or is pending disbursement. We are seeking authorization to amend the funding agreement to allow the corporation to advance the remaining funds at closing. The total state funding commitment to be made available by ESDC will remain unchanged."

According to Section 3.02 (b) of the State Funding Agreement, p. 9-10, the ESDC would not advance State Funding Payments
which (1) would reimburse Soft Costs, (2) aggregate more than the Eligible State Project Costs actually incurred as of the date of such request, (3) would result in the aggregate State Funding Payments disbursed pursuant to this Section 3.02 exceeding the aggregate City Funding Payments disbursed by ESDC pursuant to Section 3.04 hereof, (4) would result in the sum of (x) the aggregate State Funding Payments disbursed pursuant to this Section 3.02 and (y) the aggregate City Funding Payments disbursed pursuant to Section 3.02 hereof, exceeding fifth percent (50%) of the Eligible Project Costs actually incurred as of the date of each request.

Changes made

According to board materials just released, however, that's changed:
It is proposed that ESDC enter into an amended State Funding Agreement with Forest City to permit the Corporation to disburse the balance of the State funds at closing for eligible costs – including soft costs incurred by Forest City in connection with the design and engineering of the infrastructure improvements and certain site preparation costs (e.g. demolition costs) related to the development of the Arena or Vanderbilt train yard.

Maybe that's why another supporter, Travis Lock of the Salvation Army, testified today, without irony, "It is my sincere hope this morning that you would move forward with this project, the Atlantic Yard projects, on behalf of the Forest City Ratner Corporation."
(Remarks as delivered)

link

NoLandGrab: [We're speechless].

Posted by eric at 3:48 PM

Forest City's Performance Softens in 2Q

Morningstar.com
by David Rodziewicz

A Morningstar analyst combs through the Atlantic Yards developer's parent company's 2Q report and concludes:

Although the company has made some headway on reducing debt and pushing back maturities through asset sales and its first-quarter equity issuance, we still think Forest City has a long slog ahead. With debt maturities still around $1.6 billion over the next couple years and interest coverage below 2 times, we think the company still has room to deleverage. With fundamental declines in portfolio performance likely over the next couple years, we think the deleveraging process will be a difficult one. In our opinion, additional equity issuances are likely over the next few years as property sales in a declining real estate environment prove insufficient to reduce Forest City's debt levels.

link

Posted by lumi at 5:32 AM

September 16, 2009

Court Street Cinema Fire, Again

Brownstoner

Forest City's Court Street Cinema was the scene of a fire for the second time in six weeks.

The UA Cinema on Court Street in Brooklyn Heights had a small fire incident on Saturday that left none injured. According to the Brooklyn Heights Blog, a popcorn machine was the cause of the fire, but the sprinkler system kept it from getting out of control. The incident did fill the theater with smoke and force everyone in the theater to evacuate. Almost the exact same sequence of events occurred last month—a small fire caused by a faulty popcorn machine. Perhaps it's time for UA Cinema to invest in some new popcorn machines?

link

NoLandGrab: OK, Bruce Ratner can't pop popcorn in his theater without starting a fire, and we're counting on him to keep crowds of 18,000 people safe in a building that the NYPD would surely classify as a High Tier security risk? The city's decision to cut back on its promise of heightened security measures at Goldman Sachs' new lower-Manhattan HQ is sure to add fuel to the, ahem, fire.

NY Post, City to 'unsafe' Sachs: Pay for protection

Goldman Sachs, the wealthiest bank on Wall Street, is locked in a bitter battle with city and state officials over the number of cops available to patrol its gleaming new world headquarters at Ground Zero.

The bank is close to completing its $2.4 billion, 43-story skyscraper on Vesey Street in Battery Park City and says it will be ready to move in by the end of this year.

But the big move could be delayed as the city and state scale back an expensive security agreement with the bank. The squabble is dealing yet another blow to the redevelopment of Ground Zero -- and possibly putting taxpayers on the hook for $320 million if the Goldman-government accord collapses.
...

One key incentive was the promise to provide Goldman with a much higher level of security than usually given to a Wall Street firm. Under the terms of the contract, the city pledged manpower, and the state was in charge of security infrastructure such as blockades, surveillance equipment and guard stations.

But now the city has told Goldman it will scale back the number of cops -- pointing to budget woes and arguing that the higher levels are not yet necessary, given the long delays in opening office buildings at the World Trade Center site.

Sources also said the state is so far behind in its infrastructure plans that the NYPD would be unable to use the number of cops outlined in the deal, even if it had them to spare.

NLG: Don't worry, we're sure the security experts at Forest City will protect us if the city and state won't. Butter on your popcorn?

Posted by eric at 8:00 PM

September 12, 2009

How to Make Us Care About the LIRR: With This Thing!

Curbed

The entrance along Hanson Place to the Long Island is a many-years-delayed public benefit that was promised as part of Bruce Ratner's Atlantic Center and Atlantic Terminal malls. Curbed has posted a picture of the inside of the entrance as it slowwwly makes it way to completion.

The Atlantic Yards megaproject has distracted us from the long overdue completion of the new Long Island Rail Road entrance pavilion just across Flatbush Avenue, wedged into the Atlantic Center mall. It was supposed to be done in 2007, but "unforeseen site conditions" delayed the target date to, hey now, this fall! As anyone who's wandered the Atlantic Avenue/Pacific Street transit hub (while it's still called that) knows, the construction has become a confusing mess over the years. But here's the thing: Has it all been worth it? Check out the startling reveal above of the work-in-progress station, complete with sky views up to One Hanson Place's dome and a cool pixel-like thingamajig...

link

Posted by steve at 5:02 AM

September 11, 2009

Lots of crime at Flatbush and Atlantic

The Brooklyn Paper, Police Blotter
by Ben Muessig

Lawlessness was rampant last week in Bruce Ratner's two local malls, which the Empire State Development Corporation famously (and falsely) claimed was devoid of such acts in the Atlantic Yards blight study.

Target: Target

An armed robber heisted $1,300 from the Target department store on Atlantic Avenue on Sept. 2.

The perp masqueraded as a customer when he purchased in item at around 6:15 pm — but once the cashier opened the register he revealed his true intentions.

“Give me the hundreds. I have a gun,” he told the employee.

The victim handed over the cash, and the crook fled from the store, which is near the corner of Flatbush Avenue.

Marshall law

Thieves ransacked the Marshall’s department store on Atlantic Avenue on Sept. 6, implementing their own form of “Marshall law” in at least two purse snatchings. Here are the shocking details:

• A crook grabbed a handbag from a shopper’s cart inside the shop, which is between Fort Greene Place and South Portland Avenue, at around 3:30 pm.

The bad guy got away with the victim’s wallet, credit cards, IDs, and $250.

• Just 45 minutes later, a perp heisted another purse from a shopping cart.

article

Posted by eric at 6:23 PM

September 10, 2009

Forest City Enterprises: Good News, Bad News

The good news is that Atlantic Yards developer Forest City Enterprises (FCE) is losing less money than last year, the bad news is that FCE is still hemorrhaging money.

The Plain Dealer, Loss narrows at Forest City during the second quarter

Forest City Enterprises Inc. lost $1.8 million during the second quarter, an improvement from the real estate company's $8.4 million loss a year before.

Forest City said Tuesday that it lost 1 cent per share during the three months that ended July 31, compared with a loss of 8 cents per share during the second quarter of 2008. Earnings before depreciation, amortization and deferred taxes were $95.5 million, up 8.1 percent from $88.3 million a year before. EBDT, a measure used by analysts and investors, strips out factors including gains and losses on sales of rental properties, divisions and other investments.
...
Revenue for the six months that ended July 31 was $629.8 million, down from $632.6 million a year before.

Forest City (NYSE: FCE-A) reported its earnings after markets closed Tuesday. Shares of the company's stock were trading at about $9.86, up 7.9 percent or 72 cents, just after 11 a.m. today.

Atlantic Yards Report, Forest City reports better results, but continued losses, including losses on the Nets

Analysis of FCE's quarterly earnings report includes this bit of where the continued losses incurred by the NJ Nets:

Revenues were down slightly from last year, but so were costs. FCE said in the press release, "Reduced losses on the Nets provided a pre-tax EBDT increase of $3.0 million."

What does that mean? According to a 10-Q document filed with the SEC:

Our equity investment in The Nets incurred a pre-tax loss of $8,307,000 and $18,988,000 for the three and six months ended July 31, 2009, respectively, representing a decrease in allocated losses of $241,000 and $3,033,000 compared to the same periods in the prior year. Generally accepted accounting principles require us to report losses, including significant non-cash losses resulting from amortization, in excess of our legal ownership of approximately 23%. For the six months ended July 31, 2009 and 2008, we recognized approximately 51% and 57% of the net loss, respectively, because profits and losses are allocated to each member based on an analysis of the respective member’s claim on the net book equity assuming a liquidation at book value at the end of the accounting period without regard to unrealized appreciation (if any) in the fair value of The Nets. For the six months ended July 31, 2009, we recognized a lower share of the net loss than in the prior year because of the distribution priority among members.

Included in the losses for the six months ended July 31, 2009 and 2008 are approximately $10,238,000 and $13,544,000, respectively, of amortization, at our share, of certain assets related to the purchase of the team. The remainder of the losses substantially relate to the operations of the team. Comparable to prior years, the team is expected to operate at a loss in 2009 and will require additional capital from its members to fund the loss.

(Emphases added)

Posted by lumi at 6:31 AM

September 9, 2009

Forest City in the News

PRNewsWire, Forest City Reports Fiscal 2009 Second-Quarter and Year-to-Date Results

According to the Forest City Enterprises press release, losses are down compared to last year:

The second-quarter net loss attributable to Forest City Enterprises, Inc. was $1.8 million, or $0.01 per share, compared with a net loss of $8.4 million, or $0.08 per share, in the second quarter of 2008. Net loss for the six months ended July 31, 2009, was $32.5 million, or $0.26 per share, compared with $48.8 million, or $0.47 per share for the same period in 2008.
...
The second-quarter net loss attributable to Forest City Enterprises, Inc. was $1.8 million, or $0.01 per share, compared with a net loss of $8.4 million, or $0.08 per share, in the second quarter of 2008. Net loss for the six months ended July 31, 2009, was $32.5 million, or $0.26 per share, compared with $48.8 million, or $0.47 per share for the same period in 2008.

FoxBusiness.com, Forest City Enterprises (FCE.A) Bullish Technical Alert - Trend Up 35.4%

Forest City Enterprises (NYSE:FCE.A) is trading 2.3% higher (up $0.21 to $9.13) today on volume of 512,709 shares. The stock has traded within a 52-week range of $3.26 and $40.49.

Forest City Enterprises is currently above its 50-day moving average of $7.10 and above its 200-day moving average of $6.48.

DDDB.net, Forest City Quarterly Results Claim Arena Construction Would Start in 2009. Impossible.

Develop Don't Destroy Brooklyn, the group leading the fight against Bruce Ratner's controversial Atlantic Yards megaproject, has some news for investors and analysts.

It's official, Forest City is delusional and doesn't mind deluding its investors and analysts. From Forest City Enterprises second quarter results:

...Forest City ended the second quarter with seven projects under construction with a total cost of $2.1 billion at the Company's pro-rata share ($2.5 billion at full consolidation). With the exception of the Barclays Arena at Atlantic Yards in Brooklyn, and the fee-development construction of a new City Hall project in Las Vegas, the Company does not anticipate commencing construction on any additional projects in 2009.

It is impossible for arena construction to start in 2009.

FCE investors and anaylsts can take that as a tip.

TradingMarkets.com, Forest City reports losses narrow to $1.8 million in second quarter

BizJournals.com, Fidelity Investment’s office wins national award

Developer Forest City won a green building award for an office building in the company's Mesa Del Sol project in New Mexico.

Posted by lumi at 5:40 AM

September 8, 2009

Forest City in the News

REMINDER: Forest City Enterprises is due to release second-quarter earnings today, followed by a conference call with investors on Friday. press release

Washington Business Journal, Harris Teeter eyes Forest City's The Yards

The Harris Teeter grocery chains plans to open a store near Nationals Park after signing a letter of intent with developer Forest City Washington Inc., according to sources close to the deal.

The Matthews, N.C.-based chain already has two stores in the city....

The store near the ballpark will be 50,000 square feet in the ground floor of a building planned for 401 M St. SE as part of Forest City's major mixed-use waterfront development, The Yards.

Posted by lumi at 5:04 AM

September 6, 2009

Forest City In the News

Reuters, Forest City Enterprises Notice of Second-Quarter 2009 Earnings Conference Call

Forest City Enterprises, Inc., (NYSE: FCEA and FCEB) will release its second-quarter 2009 financial results on Tuesday, September 8, 2009, after the market close, and will hold a conference call with investors on Friday, September 11, 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, Friday, September 11, 2009. A live webcast of the call will also be available online at www.forestcity.net .

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, go to: https://www.theconferencingservice.com/prereg/key.process?key=PHJGA4XH7

To participate on the day of the call, dial 888-713-4205 and use access code 38602262, approximately five minutes before the call. Callers without a pre-registration PIN can press *1 to bypass the instructions and speak to a live operator. Tell the operator you wish to join the Forest City 2(nd) Quarter Earnings Conference Call. (International callers, please dial 617-213-4862)

The call will be replayed from September 11, 2009, 2:00 P.M. ET to October 11, 2009, 11:59 P.M. ET. The replay number is 888-286-8010, access code 94172948. (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.

SOURCE Forest City Enterprises, Inc.

AnnMarie Fenske of Forest City Enterprises, +1-216-621-6060

Posted by steve at 8:52 AM

September 2, 2009

Forest City in the News

SmarTrend, Forest City Enterprises (FCE.A) Bullish Technical Alert - Trend Up 40.4%

Forest City Enterprises (NYSE:FCE.A) is trading 2.3% higher (up $0.21 to $9.46) today on volume of 92,210 shares. The stock has traded within a 52-week range of $3.26 and $40.49.

Forest City Enterprises is currently above its 50-day moving average of $6.90 and above its 200-day moving average of $6.43.

SmarTrend is bullish on shares of FCE.A and our subscribers received an Uptrend alert on July 27, 2009 at $6.74, which has returned 40.4% to date.

Press Release, via Reuters.com, Forest City Announces Loan Extension and Tenants for Ridge Hill

Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced that Forest City Ratner Companies, its New York-based subsidiary, has reach an agreement with a 13-member bank group on a two-year extension and modification of the $557 million construction financing for the retail/mixed-use Ridge Hill project, currently under construction in Westchester County, New York.

The financing, which originally matured in August 2010, will now have an initial maturity of August 2012, with two 12-month extensions available.

Cleveland Plain Dealer, Forest City gets extension on $557 million in financing for New York project
Associated Press, viaForbes.com, Forest City unit modifies construction financing

Posted by lumi at 4:37 AM

September 1, 2009

Tracing the deceptive property ownership map back to Forest City Ratner

Atlantic Yards Report

Norman Oder sheds a little more light on the Great Property Control Swindle.

Not unlike the way that the Empire State Development Corporation (ESDC) puts its name on Atlantic Yards Construction Updates produced by developer Forest City Ratner (FCR), evidence suggests that the map of property ownership in the AY footprint also comes directly from the developer.

I earlier today suggested that the ESDC was misleading people by using an 11/1/06 map to describe current ownership. And I wrote in May that the ESDC seemed to be taking FCR's cue in presenting facts on the map.

But it may be much simpler: ESDC is simply reproducing what Forest City gives them.

article

NoLandGrab: Good grief! The ESDC is either totally incompetent, or Bruce Ratner really is pulling all the strings in Albany.

Posted by eric at 8:58 PM

August 31, 2009

FCR consultant on Ridge Hill--a project still under investigation--now works for Senate Democrats

Atlantic Yards Report

How Lowe can you go?

In the Daily Politics, Liz Benjamin suggests that State Senator Bill Perkins, who held a hearing on Atlantic Yards, might have reason to be wary of new Democratic Senate Campaign Committee (DSCC) staffer Melvin Lowe.

Benjamin noted that Lowe "has provided consulting services to developer Bruce Ratner on the Atlantic Yards project in Brooklyn"--news to me--and that Perkins is concerned, given that he feels "more answers" are needed regarding AY.

Lowe, who's worked for several government officials and campaigns, "will be providing 'oversight' at the DSCC," Senate Democratic spokesman Paul Rivera told Benjamin. The DSCC wants to retain and build on a slim Democratic majority, a crucial priority for state Democrats in 2010.

article

Posted by eric at 10:05 PM

Forest City Press Release: Forest City Announces Loan Extension and Tenants for Ridge Hill

Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced that Forest City Ratner Companies, its New York-based subsidiary, has reach an agreement with a 13-member bank group on a two-year extension and modification of the $557 million construction financing for the retail/mixed-use Ridge Hill project, currently under construction in Westchester County, New York.

The financing, which originally matured in August 2010, will now have an initial maturity of August 2012, with two 12-month extensions available.

"We're extremely pleased to announce this important step for our great Ridge Hill project, which is gaining momentum and attracting strong interest from top-tier retailers," said Charles A. Ratner, Forest City Enterprises president and chief executive officer. "I want to congratulate our New York team on this achievement.

"We deeply appreciate the commitment demonstrated by all of our lenders, and in particular, the Agent banks, Bank of America, N.A., KeyBank Real Estate Capital, and ING Real Estate Finance. Their support reflects the great location and extraordinary quality of this project, as well as the deep relationships we have built over the years. It also highlights our continuing ability as a company to proactively manage our debt maturities in the current economic and financial-market conditions," Ratner added.

link

NoLandGrab: Forest City's "ability as a company to proactively manage" its "debt maturities" appears to be necessitated by Forest City's inability to meet its obligations without some leniency from its lenders.

Posted by eric at 12:43 PM

August 28, 2009

Who's cleaning up Pacific Street blight? Forest City Ratner

Atlantic Yards Report

In September 2007, some AY opponents bushwhacked a clean-up along Pacific Street between Fifth and Sixth Avenues.

Last Saturday, when I took a tour group around Prospect Heights, that stretch of Pacific Street looked pretty trim. But the stretch between Sixth and Carlton avenues looked pretty messy, even though a large residential building, Newswalk, occupies most of the street opposite it.

Now, however, it's been cleaned up, as the sequence of photos below shows. And who's responsible for removing this Pacific Street blight? As the name on the blue car indicates, Commons Associates of MetroTech Center--an organization led by Forest City Ratner.

article

Be sure to read the comments section for some revealing backstory about the condition of the sidewalk.

Posted by eric at 9:00 AM

August 27, 2009

NY KATRINA COUPLE FETED

NY Post
By Jennifer Fermino

Bruce Ratner's sister garnered some ink for post-Katrina largesse:

Four years after Hurricane Katrina devastated the Gulf Coast, the governor of Mississippi is honoring an Upper West Side couple who helped raise $3.1 million for a community center.

Gov. Haley Barbour is feting Ellen Ratner, sister of real-estate developer Bruce Ratner, and her partner, Cholene Espinoza, today in his mansion for their work in creating the center in Pass Christian, which features dance classes, a yoga studio and the only public pool for 30 miles.

Espinoza -- a former pilot who was supposed to have flown aboard ill-fated United Flight 93 on 9/11 before a schedule change -- personally donated $130,000 to buy the land.

article

Posted by lumi at 5:34 AM

August 26, 2009

Forest City in the News

Washington Business Journal, San Juan hires Forest City Washington

Forest City Washington Inc., the local subsidiary of Forest City Enterprises Inc., has won a contract to provide real estate advisory services to the city of San Juan in Puerto Rico.

The company, which is developing the mixed-use waterfront development The Yards in Southeast D.C., announced a month ago that it would advise D.C. on another major Southeast property on the Anacostia River, Poplar Point.

For San Juan, the company will serve as program manager for a 21-block waterfront district to include new housing, offices, hotels, retail, parking, parks and a marina. The 100-acre site includes almost two miles of waterfront and is located east of the Old San Juan district, according to the company.

Cleveland Plain Dealer, Forest City picked as program manager for 21-block waterfront project in Puerto Rico

Forest City, a real estate company based in Cleveland, will provide management services for the project in exchange for fees. The company was selected for the job by the Puerto Rico Department of Economic Development and Commerce and the Puerto Rico Tourism Company. The proposed project could involve homes, a hotel component, offices, retail, parking and public parks, including a marina.

Responding to a tightening on credit for commercial real estate and a near-halt to development nationwide, Forest City largely has shelved new construction in favor of reducing its debt and managing its existing properties. The company has been exploring ways to make money by providing advisory and management services -- rather than putting shovels in the ground.

PR Newswire, Forest City Named Program Manager for Redevelopment of San Juan, P.R. Waterfront

"We are honored to be selected and extremely excited to provide our full array of development management services for the redevelopment of San Juan's waterfront," said Charles A. Ratner, Forest City president and chief executive officer. "This is precisely the type of project - including elements of urban infill, revitalization and waterfront redevelopment - that Forest City has experience with and does well. This selection also reflects our continued strategic expansion into asset management and third-party advisory services," he added.

Cleveland Plain Dealer, National real estate group to honor Forest City for green building

A Forest City Enterprises Inc. partnership has been tapped to receive a national award for sustainable development of an office building in Albuquerque, New Mexico.
...
Forest City's project is part of a massive community being developed through a public-private partnership in Albuquerque. The lead developer is Forest City Covington, a joint venture between Forest City Enterprises of Cleveland and Covington Capital Corp. The partners are being recognized for their work on a two-story office building for Fidelity Investments.

The developers aim to have the building certified "Gold" through the U.S. Green Building Council's Leadership in Energy and Environmental Design program. LEED certification, which takes into account factors including energy savings, water use, building materials and interior environment, comes at four levels: Certified, Silver, Gold and Platinum.

RealEstateRama, NAIOP Sustainable Development Award Honors ProLogis and Forest City Covington: Projects to be honored at Development ‘09: The Annual Meeting for Commercial Real Estate, August 25, 2009

Posted by lumi at 5:02 AM

August 25, 2009

Forest City in the News

SmarTrend, Forest City Enterprises (FCE.A) Bullish Technical Alert - Trend Up 21.6%

Forest City Enterprises (NYSE:FCE.A) is trading 2.6% higher (up $0.21 to $8.20) today on volume of 185,517 shares. The stock has traded within a 52-week range of $3.26 and $40.49.

Forest City Enterprises is currently above its 50-day moving average of $6.61 and above its 200-day moving average of $6.46.

Yonkers Tribune, President Lesnick, Behind Closed Doors, Ridge Hill, SFC Yonkers, Councilmember Gronowski By Hezi Aris

Delays at Bruce Ratner's Ridge Hill development might be a cautionary tale for political leaders in Yonkers who are counting on the next megadevelopment deal to save their city... or not:

In light of the Journal News article divulging the non-paying, and now delayed 2011 completion date for the Forest City Ratner Ridge Hill development, one must wonder how Yonkers will survive the fiscal hemorrhaging it is undergoing, especially because there is no prospect for additional funding to relieve the exhausted, taxpaying homeowner for the next three to five years forward.

Posted by lumi at 5:41 AM

August 24, 2009

Yonkers' Ridge Hill opening postponed

The Journal-News
By LEN MANIACE

Like Atlantic Yards, the construction timeline for Bruce Ratner's other regional megaproject is slipping:

While construction is well under way on the massive Ridge Hill development above the New York State Thruway, hopes for opening the mixed-use complex by this year's holiday shopping season have evaporated in the national recession.

The new projected opening? 2011.

Officials at Forest City Ratner Cos. say the lagging construction schedule at the $685 million retail and residential development is due to the company's wish to time the opening to a better economy, rather than from trouble obtaining financing or attracting tenants.
...
Construction began in 2007, and through most of that year Forest City Ratner officials talked about opening the 1.2 million-square-foot complex in late 2009. But in June, the developer's quarterly report pegged the opening somewhere between the third quarter of 2010 and sometime in 2011, an estimate that Pesin recently conceded was somewhat optimistic.

article

Posted by lumi at 5:51 AM

August 21, 2009

2,000 Brooklyn Kids Getting New Backpacks, School Supplies

Brooklyn Daily Eagle
by Mary Frost

Nashay, Nasir and Precious are just three out of 2,000 disadvantaged Brooklyn kids who are receiving backpacks filled with essential back-to-school supplies, thanks to the National Association for the Advancement of Colored People’s (NAACP) annual Back-to-School/Stay-in-School Program.
...

Karen Boykin-Towns, president of the NAACP’s Brooklyn Branch, said, “Despite the tough economy, we are pleased to deliver on our commitment of providing 2,000 free backpacks to our neediest students.” She added that her daughter advised her to reach out to Thirteen when she was trying to find sponsors to help fill the backpacks. WNET/Thirteen, partnering with Brooklyn’s NAACP for the first time, supplied “Cyberchase” activity books, pencils and bookmarks – and the huggable, larger-than-life “Digit,” from PBS’s award-winning math series “Cyberchase.”
...

Sponsors of the event include Brooklyn Public Library, Con Edison, Council of School Supervisors & Administrators, DELBAC Inc., Everlast, Forest City Ratner, G&B Foundation, Independence Community Foundation, Neighborhood Improvement Association, Polytechnic Institute of NYU -- Center for Youth In Engineering & Science, Pratt Institute – America Reads, Rent-A-Center, Society of Hispanic Provisional Engineers, Society of Women Engineers, National Society of Black Engineers and Verizon. [emphasis, ours]

article

Wow, imagine how many backpacks and essential school supplies could've been given to needy kids if the city and state weren't sinking hundreds upon hundreds of millions of dollars into Forest City's basketball arena project!

Posted by eric at 11:22 AM

So who is the meanest corporation on the planet?

CUACC (Citizens United Against Corporate Corruption

OK, have you already guessed the answer?

Some residents of the Pavilion Apartments in Chicago are not too enamored of their landlord.

Hands down our winner is........
FOREST CITY ENTERPRISES

EVERY picture we took here was from just ONE of their properties. These are just a small sampling of the hundreds of pictures we took altogether. The economy cannot be used as an excuse for the years of deterioration here.

Click thru for some gnarly photos of black mold.

link

Related coverage...

NeuLandlord, Forest City Enterprises MAYDAY MAYDAY

Posted by eric at 10:02 AM

August 14, 2009

After breaking with developer, Bloomfield must pay $4.8 million

The Star-Ledger
by Halley Bondy

After a Superior Court judge upheld a $4.8 million arbitration ruling against Bloomfield, the township has to pay it to a company that some officials said single-handedly slowed downtown development plans.

Two weeks ago, the township issued a bond with a 1.4 percent interest rate to pay the $4.8 million, according to redevelopment consultant Ken DeRoberts. The money will pay Forest City, a Cleveland-based development company that took the township to arbitration last year after it was terminated as the city's primary redeveloper. Bloomfield appealed to a Superior Court judge who upheld the ruling in June.

"I see this as a burden on the taxpayers of the town," said councilman Robert Ruane. "We have still not seen one shovel in the ground."

Bloomfield's mayor Raymond McCarthy and five council members--not including Ruane--issued a joint statement Monday that the developer "failed our community, wasted our time and resources and destroyed our confidence in their ability to help move our community forward."

article

NoLandGrab: New Jersey's top court ruled against the Bloomfield/Forest City plan to use eminent domain in 2007. Seems like governments have to learn the hard way that getting into bed with Forest City ain't a recipe for success.

Posted by eric at 9:37 AM

August 13, 2009

Forest City Enterprises (FCE.A) Bullish Technical Alert - Trend Up 15.6%

FOXBusiness.com

Forest City Enterprises (NYSE:FCE.A) is trading 4.1% higher (up $0.31 to $7.79) today on volume of 91,140 shares. The stock has traded within a 52-week range of $3.26 and $40.49.

Forest City Enterprises is currently above its 50-day moving average of $6.48 and above its 200-day moving average of $6.63.

link

Posted by eric at 10:26 AM

August 12, 2009

This crime is half-baked

The Brooklyn Paper, Police Blotter
by Mike McLaughlin

Criminals strike (again!) where the Empire State Development Corporation would least expect it.

Pedal meddle

Lock-busting hooligans stole two of four bicycles that a woman claims she had locked at the Atlantic Terminal plaza on Flatbush Avenue on Aug. 6.

The woman shopped in the galleria from 3:40 pm to 4:20 pm, but when she exited the mall, between Hanson Place and Atlantic Avenue, she found a clipped bike lock and discovered that two of her velocipedes were missing.

article

NoLandGrab: Fortunately, the victim still had two bicycles remaining to get her where she was going.

Posted by eric at 11:04 AM

Forest City in the News

Bradenton Herald, Arbor Park developer avoids foreclosure

Forest City dodges a foreclosure in Florida.

The developer of a stalled residential and commercial project in northern Manatee County has avoided foreclosure, according to court records.

Orion Bank has dropped its lawsuit seeking to foreclose on the 483-acre Arbor Park project after reaching a settlement with the developer, Palmer Investors LC, court records show.

Details of the settlement were not disclosed, and several attorneys involved in the case declined comment Monday.

But a Tampa attorney representing Palmer Investors — a joint venture between Medallion Homes and Forest City Enterprises Inc., a real-estate development company based in Cleveland — said Orion agreed to modify the loan terms.

The attorney, William Dufoe, referred other questions to Forest City. Calls to the company were not immediately returned.

PR Newswire, Forest City Announces Major Pittsburgh Office Tenants

Two new tenants and a renewal in Pittsburgh prompt Forest City CEO Chuck Ratner to claim it's "further evidence of the strength of our office portfolio nationwide, which continues to perform well, even under current economic and market conditions."

HorseRaceInsider, Another 13 Tenants Announced for The Village at Gulfstream Park; 45 in All, and Counting

Forest City Enterprises announced the names of another 13 restaurants and stores – ranging from steak houses to a surf shop – that will take up residence at The Village at Gulfstream.

The Village is expected to have its grand opening Feb. 11, the Thursday after Super Bowl XLIV, which will be played in nearby Dolphin Stadium, about nine miles due west of Gulfstream Park.

Posted by eric at 9:37 AM

August 7, 2009

Forest City in the News

PR Newswire, Forest City Announces New Tenants for The Village at Gulfstream Park

According to a Forest City Enterprises press release, the retail space is "70 percent leased" at the company's mixed-use office-park/mall attached to the Gulfstream thoroughbred racetrack.

The Miami Herald, Tenants announced for Village of Gulfstream

When the Village at Gulfstream Park opens in Feb. 2010, visitors will be able to surf the waves, experience a Parisian cabaret and taste Moroccan cuisine.

These experiences are some of the latest tenants announced Wednesday by Forest City Commercial Development for the Hallandale Beach retail and entertainment complex, which has been struggling in its leasing efforts because of the economy.

The newest 13 tenants include Adrenalina, an extreme sports retailer featuring the FlowRider surfing ride; Paradis Latin Miami, a cabaret establishment, and Ta-Zin, Moroccan cuisine and entertainment.

Other new names: Apricot Lane, Aventura's Finest Hand Car Wash, Bartini's, Bobby Chan, Claudio, Claudio Shoes, Lilly McKay, Roxstar, Shoe Freak and Via Montenapoleon.

Posted by lumi at 5:00 AM

August 6, 2009

Brownstoner: Hold off on angry letters and glassed up

City Officials Call for Atlantic Yards Disclosure

If you have an angry letter for City Council Members David Yassky and Bill de Blasio regarding their apathy towards the Atlantic Yards development, hold off on stamping and sending it.... According to the press release from the Prospect Heights Neighborhood Development Council, they are "calling on the Empire State Development Corporation to fully disclose plans for the Atlantic Yards project, including an updated site plan, and prepare a supplemental environmental impact statement (SEIS) for public review."

Development Watch: 80 Dekalb Getting Close

The 36-story development that Forest City Ratner is building at 80 Dekalb Avenue topped out in May and, according to this photo we snapped yesterday, is almost all glassed up. It looks like they changed the facade a little on the upper floors, replacing the exterior panels with windows, doesn't it?

Posted by lumi at 6:39 AM

August 5, 2009

The best and worst deals

The 15 biggest winners and losers since the crunch

The Real Deal
by Sarah Ryley

Next month will mark the one-year anniversary of the fall of Lehman Brothers — a date often referred to in "pre-" and "post-" terms in the New York City real estate market. With that in mind, The Real Deal zeroed in on the 15 best and worst deals since Wall Street's collapse and the earlier onset of the credit crunch.

The deals were selected based on interviews with real estate professionals, published reports from the past year, research and an informal survey.
...

Best: Bruce Ratner's pending purchase of the Vanderbilt Yards site in Brooklyn from the MTA for $100 million

Instead of charging developer Bruce Ratner $100 million in one lump sum for the right to build over Brooklyn's 8.5-acre Vanderbilt (Atlantic) Yards site, as originally agreed, the MTA announced in June that Ratner could pay just $20 million upfront to close on the portion of the rail yards beneath his planned arena for the Nets. Payments for the rest of the property, if he continues building, could be spread over 20 years, starting at $2 million a year in 2012 and jumping to $11 million in 2016 at an implied 6.5 percent interest rate, according to financial services firm Keefe, Bruyette & Woods.

The original $100 million purchase price was already far below the yard's appraised value, which the MTA justified by the additional $345 million Ratner promised he would make in infrastructure improvements. Under the new agreement, however, Ratner is not obligated to spend as much on those upgrades.

Schechtman said that while the purchase price of the land may be high in today's market, "the built-in financing over a 20-year period, at a time when there is an absolute absence of construction and land financing, makes this a real coup."

article

NoLandGrab: Wow, what a steal for The Bruce! And since the seller is a public corporation, Bruce's "real coup" means a "real screwing" for taxpayers. Of course, this is one deal that's still a long way from being "done."

Loyal NLG readers will recognize Sarah Ryley's byline from her days covering Atlantic Yards for the Brooklyn Daily Eagle.

Posted by eric at 10:03 AM

Forest City Enterprises (FCE.A) Bullish Technical Alert - Trend Up 8.7%

TradingMarkets.com

Aug 04, 2009 (SmarTrend(R) Spotlight via COMTEX) -- FCE.A | Quote | Chart | News | PowerRating -- Forest City Enterprises (NYSE:FCE.A) is trading 1.3% higher (up $0.09 to $7.33) today on volume of 165,054 shares.

The stock has traded within a 52-week range of $3.26 and $40.49.

Forest City Enterprises is currently above its 50-day moving average of $6.35 and above its 200-day moving average of $6.85.

SmarTrend is bullish on shares of FCE.A and our subscribers received an Uptrend alert on July 27, 2009 at $6.74, which has returned 8.7% to date.

link

Posted by lumi at 5:31 AM

Minor injuries, major horror, in Court Street multiplex fire

The Brooklyn Paper
By Robert Voris

Though this didn't make the first cut of Tracy Collins's Forest City Ratner boycott list, the development company's UA multiplex on Court Street made the news when a fire forced evacuation and caused several injuries:

At long last, it was the right time to yell “Fire” in a crowded movie house as the United Artists multiplex on Court Street was briefly consumed by smoke during a crowded afternoon screening on Tuesday.

Chaos engulfed the movie theater shortly after 2 pm, as patrons, some covering their mouths, had to find their own way to the smoky lobby of the Bruce Ratner-owned 12-screen theater at State Street in Downtown.

Eight minor injuries, mostly from smoke inhalation, were reported in the fire, which apparently started in the popcorn maker and quickly forced the evacuation of all 11 floors of the building.
...
The movie theater was last in the news earlier this year when owner Ratner put it on the market, though he did not find a buyer.

article

Posted by lumi at 5:12 AM

August 2, 2009

Moody's says FCE's bond rating is junkier, but that doesn't affect the arena bonds--yet

Atlantic Yards Report

Norman Oder examines how credit ratings for developer of the proposed Atlantic Yards project, Forest City, might affect its ability to finance an arena.

Develop Don't Destroy Brooklyn points out:
Forest City City Enterprises [FCE], the Cleveland-based parent of Forest City Ratner which is looking to float a $680 million bond for its proposed Barclays Center Arena, was given a B3 or "junk" debt rating, with a negative outlook, by Moody's [Investors Service].

But Standard & Poor's last October downgraded its rating of FCE's senior unsecured debt to junk status, as well, from BB- to B+. (At that point, FCE stock was trading at $11.91. Now it's at $7.14, after a recent uptick.)

Any difference between the ratings? And does it affect the arena?

The answer, according to the finance blogger Gari N. Corp, is yes, but only somewhat.

Does the downgrade matter?

His response: Moody's cut FCE by a little more. B3 on the Moody's scale is like B- on the S&P scale. Which is to be expected, given the bad news out of the commercial real estate business in the period between the two downgrades.

The downgrade matters, but it isn't everything. The arena financing will need to stand and fall on the credit rating of the arena. In good times for the developer, it doesn't want a terrible project dragging on its balance sheet. In bad times, the project doesn't want the parent's troubles distracting it.

But liquidity (access to capital) is important for a developer. It might need to fund cost overruns or revenue shortfalls with additional equity, and if it can't, the project has to borrow more cash just to sit around in case lenders need it. A rating cut makes it more difficult and expensive for the developer to raise money for this sort of thing. And it does, whatever the agencies say, edge a developer closer to bankruptcy, because it can't get access to financing, because some of its debt agreements might have clauses that say the developer has to repay some of its debt at a certain level (not common these days, but it happens). The agencies don't like their ratings becoming self-fulfilling prophecies, and they'd say that a weak company will fall anyway.

I'd start getting worried when FCE's rating has a C in it somewhere.

link

Posted by steve at 9:21 AM

July 30, 2009

Forest City in the News

Moody's downgrades Forest City to B3; outlook negative

[Full text, after the jump]

Approximately $1.1 billion of securities affected.

New York, July 29, 2009 -- Moody's Investors Service today lowered the senior unsecured debt ratings of Forest City Enterprises, Inc. to B3 from B1, and maintained the rating outlook on negative. This rating action was driven by the continuing weakness in Forest City's credit metrics, particularly its fixed charge coverage (at 1.2x for Q1'09) and net debt/EBITDA (at 16.8x in Q1'09), as well as by persistent challenges in both the real estate market and the credit environment.

The Cleveland Plain-Journal, Forest City Enterprises chosen for advisory team for Washington, D.C. project

Forest City Enterprises Inc. has been tapped for a team that will provide advisory services, in exchange for fees, to the District of Columbia related to a planned waterfront development in Washington, D.C.

The real estate company, based in Cleveland, largely has shelved development and focused on cleaning up its finances during the recession. Forest City also has been exploring new ways to make money, expanding into asset management and other fee-based, third-party services.

Washington Business Journal, Forest City to advise D.C. on Poplar Point

D.C. Mayor Adrian Fenty’s economic development team has selected Forest City Washington Inc. as real estate adviser for the planning of Poplar Point, the company announced Wednesday.

“We’re honored to have been selected as part of this team to assist the District in moving this important project forward,” said Charles Ratner, president and CEO of Cleveland-based Forest City Enterprises Inc., of which Forest City Washington is a subsidiary. Partners in the advising roll are Wall Development LLC, Atlanta-based Strategic Advisory Group, Los Angeles-based AECOM Technology Corp. and Smoot Construction Corp.

The team “will assist the District with master planning, entitlements, financial feasibility, phasing strategies, infrastructure financing and disposition of the project.”

FAIR USE NOTICE

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. Material from diverse and sometimes temporary sources is being made available in a permanent unified manner, as part of an effort to advance understanding of the social justice issues associated with eminent domain, local development and land use. It is believed that this is a 'fair use' of the information as allowed under section 107 of the US Copyright Law. In accordance with Title 17 USC Section 107, the site is maintained without profit for those who access it for research and educational purposes. For more information, see: www.law.cornell.edu/uscode/17/107.shtml.

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Moody's downgrades Forest City to B3; outlook negative

Approximately $1.1 billion of securities affected.

New York, July 29, 2009 -- Moody's Investors Service today lowered the senior unsecured debt ratings of Forest City Enterprises, Inc. to B3 from B1, and maintained the rating outlook on negative. This rating action was driven by the continuing weakness in Forest City's credit metrics, particularly its fixed charge coverage (at 1.2x for Q1'09) and net debt/EBITDA (at 16.8x in Q1'09), as well as by persistent challenges in both the real estate market and the credit environment.

The current rating reflects the slowdown in Forest City's core portfolio performance in tandem with the broad economic deterioration: its retail and residential sectors posted negative same property NOI growth of -1.0% and -1.8%, respectively, in the first quarter of 2009. Its office portfolio; however, performed better with same property NOI growth of 4.4%, buoyed by long-term leases and strong results from its life sciences assets. Forest City also faces a significant, although materially curtailed, development pipeline in excess of $2 billion with $777 million in remaining costs. Positively, construction financing is in place for all except $6.4 million, with a portion of the remaining financing ($158.5M) subject to certain leasing hurdles. In addition, Forest City will need to re-finance $159 million of secured debt in its fiscal 2009, which is a reduction from $242 million at YE08.

Nevertheless, Forest City's portfolio continues to benefit from well-laddered lease expirations and no significant tenant exposures. Also, the firm's largely non-recourse borrowing strategy allows it a measure of flexibility when addressing upcoming maturities. Positively, Forest City raised $330 million of equity in May 2009, which allowed the firm to pay down most of its outstandings under the line of credit and meaningfully enhanced its liquidity.

The negative rating outlook reflects the deterioration in debt protection measures experienced by Forest City, as well as Moody's expectation of further weakness in the company's credit profile and earnings over the next several quarters due to the recessionary economic environment and very constrained capital markets.

The rating outlook is likely to return to stable once Forest City's fixed charge coverage has stabilized at above 1.2x and debt/EBITDA is closer to 14x. Maintaining sound liquidity would also be important for the outlook to be stabilized. A downgrade would be precipitated by continued earnings deterioration and resulting further pressure on leverage and coverage metrics, as well as any breach of covenants or liquidity challenges.

Moody's last rating action with respect to Forest City was on December 19, 2008, when the ratings were lowered to B1 from Ba3 and the rating outlook was maintained on negative.

The following ratings were lowered with a negative outlook:

Forest City Enterprises, Inc. -- Senior unsecured debt to B3 from B1, senior unsecured shelf to (P)B3 from (P)B1, senior subordinate shelf to (P)Caa2 from (P)B3, subordinate shelf to (P)Caa2 from (P)B3, junior subordinate shelf to (P)Caa2 from (P)B3, and preferred shelf to (P)Caa2 from (P)B3.

Forest City Enterprises, Inc. [NYSE: FCE-A] is a national real estate company that is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. At April 30, 3009, its assets totaled $12.6 billion.

The principal methodology used in rating Forest City was the Rating Methodology for REITs and Other Commercial Property Firms, which can be found at http://www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating Forest City can also be found in the Credit Policy & Methodologies directory.

CREDIT RATINGS ARE MIS'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS DO NOT CONSTITUTE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS ARE NOT RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. CREDIT RATINGS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MIS ISSUES ITS CREDIT RATINGS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

Copyright 2009, Moody's Investors Service, Inc. and/or its licensors and affiliates including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided "as is" without warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or elating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings and financial reporting analysis observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling. MOODY'S hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MOODY'S have, prior to assignment of any rating, agreed to pay to MOODY'S for appraisal and rating services rendered by it fees ranging from $1,500 to $2,400,000. Moody's Corporation (MCO) and its wholly-owned credit rating agency subsidiary, Moody's Investors Service (MIS), also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually on Moody's website at http://www.moodys.com under the heading "Shareholder Relations - Corporate Governance - Director and Shareholder Affiliation Policy." Moody's Investors Service Pty Limited does not hold an Australian financial services licence under the Corporations Act. This credit rating opinion has been prepared without taking into account any of your objectives, financial situation or needs. You should, before acting on the opinion, consider the appropriateness of the opinion having regard to your own objectives, financial situation and needs.

Provider ID: 00500511 -0- Jul/29/2009 18:57 GMT

Posted by lumi at 5:03 AM

July 29, 2009

Forest City Announces $325M in New Financings and Extensions

The CoStar Group

The announcement of refinancing and extensions of company debt casts doubt on Forest City Enterprises claim that suspension of construction at Atlantic Yards was rather due to lawsuits (not like we believed them in the first place):

Cleveland-based Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) announced that since the beginning of 2009, it has secured or completed six new financing and eight extensions of maturities, totaling approximately $325 million. The six new financings, which totaling approximately $70 million, were secured against several of Forest City's multi-family developments. The eight extensions, which total approximately $255 million, were related to the developer's Orchard Town Center in Westminster, CO; Central Station in Chicago; Tangerine Crossing in Tucson, AZ; Sidney Street at University Park in Cambridge, MA; two community projects in Manatee County, FL; and a Marriott hotel in Charleston, WV.

article

Posted by lumi at 5:04 AM

July 27, 2009

Forest City in the News

FOREST CITY FINANCIAL
While Atlantic Yards developer Forest City Enterprises has claimed that litigation has been holding back construction on the megaproject in Prospect Heights, here's more evidence that delays are due to serious cash-flow problems:

PR Newswire, Forest City Announces $325 Million in New Financings and Extensions

"Proactively managing our debt and working closely with our lenders are key to preserving and enhancing liquidity, which continues to be our highest priority," said Charles A. Ratner, Forest City president and chief executive officer. "These transactions - as well as others previously announced - demonstrate the strength of our lending relationships, the skill of our finance teams, and our ability to continue to effectively manage our non-recourse, property-level debt."

The six new financings, which total approximately $70 million, include the following:

• A $27.2 million, 35-year HUD refinancing of Easthaven at the Village, a 360-unit apartment community in Beachwood, Ohio. The refinancing closed after the end of the Company's April 30, 2009, first quarter.
• A $23.3 million, 10-year refinancing, through Fannie Mae, of St. Mary's Villa, a 360-unit, federally assisted housing complex in Newark, New Jersey.
• Three separate transactions, totaling $15.9 million, through Freddie Mac, for Cleveland-area apartment communities: Parmatown Towers and Gardens, Independence Place I and Big Creek. Maturities on the refinancings range from seven to ten years.
• A three-year, $3.4 million financing for the fourth phase of development of Cobblestone Court Apartments, a 400-unit apartment community in Painesville, Ohio. This transaction closed after the end of the Company's April 30, 2009, first quarter.

The eight extensions of existing financings, which total approximately $255 million, include the following:

• A 17-month extension of a $99.2 million construction loan for the Company's Orchard Town Center retail center in Westminster, Colorado, near Denver. An additional one-year extension is also available.
• A one-year extension of $62.6 million in financing for 45/75 Sidney Street, a pair of connected office buildings in the Company's University Park at MIT project in Cambridge, Massachusetts. This extension closed after the end of the Company's April 30, 2009, first quarter.
• A two-year extension on a $25.3 million land loan for the Company's Central Station mixed-use development in downtown Chicago.
• Two-year extensions on land loans of $15.3 million and $21.1 million for adjacent, planned-community projects in Manatee County, Florida, south of Tampa. Both extensions closed after the end of the Company's April 30, 2009, first quarter.
• An automatic, one-year extension on $18.0 million in securitized financing for the Company's Charleston Marriott, a 352-room hotel in downtown Charleston, West Virginia.
• A two-year extension on an $8.1 million land loan for the Tangerine Crossing planned community development in Tucson, Arizona.
• A two-year extension on a $5.3 million land loan for the Company's Legacy Lakes planned community in Aberdeen, North Carolina.

Denver Business Journal, Forest City gets construction-loan extension for Orchard Town Center

The Orchard Town Center outdoor shopping center in Westminster is among the Forest City Enterprises Inc. projects involved in $325 million in new financings and extensions of existing financings obtained by the developer, Forest City said Friday.

Orchard Town Center received a 17-month extension of a $99.2 million construction loan for the project, plus the option of another one-year extension.

The extension is the largest dollar amount of a total of 14 financings that publicly traded Forest City (NYSE: FCEA/FECB) has done since the beginning of its fiscal year, Feb. 1.

Cleveland Plain Dealer, Forest City closes $325 million in financings, loan extensions

The real estate company, based in Cleveland, has been trying to build up cash, pay off debt and extend existing loans as they come due. Forest City said Friday that it has closed six financing or refinancing deals, totaling nearly $70 million, since the start of its fiscal year

IT'S NOT EASY BEING GREEN
KHON.com, Wind Power Tested for Military Housing

While Forest City Enterprises is blowing hot air in Brooklyn, the company is running tests to determine the viability of wind power generation at military housing developments in Hawaii:

"We hope to understand how the wind operates here off of Pearl Harbor and eventually try to generate power using wind energy,” said John Wallenstrom, senior vice president of military housing for Forest City Military Communities Hawaii.

A 164-foot tall meteorological tower or “MET” is measuring wind speed to see how well smaller wind turbines could work here. The same test will get underway soon at other housing Forest City manages on the Marine Corps base in Kaneohe.

Posted by lumi at 5:21 AM

July 23, 2009

Forest City in the News

SmarTrend, Forest City Enterprises (FCE.A) Bearish Technical Alert - Trend Down 3.8%

Forest City Enterprises (NYSE:FCE.A) is trading 3.2% lower (down $0.20 to $6.05) today on volume of 79,408 shares. The stock has traded within a 52-week range of $3.26 and $40.49.

Forest City Enterprises is currently below its 50-day moving average of $6.41 and below its 200-day moving average of $7.51.

SmarTrend is bearish on shares of FCE.A and our subscribers received a Downtrend alert on May 14, 2009 at $6.29, which has returned 3.8% to date.

BisNow.com, WARNER: DC SHOULD BE “ENERGY CAPITAL”

From BisNow's Breakfast & Schmooze gathering in DC on Tuesday:

Two of commercial real estate’s favorite people: Forest City president Debby Ratner Salzberg and JBG managing partner Mike Glosserman.... Debbie said in the fall she thought the world was coming to an end but now believes we will be able to hobble along.

The Riverdale Press, Espada's Finances

State Sen. Pedro Espada Jr. received thousands of dollars this year in campaign donations from real estate interests, recently filed state records show.
...
Lobbyist Richard Lipsky, who is now representing the Atlantic Yards development firm and the Retail & Wholesale Department Store Union to the city, had $5,000 for Mr. Espada.

Posted by lumi at 4:47 AM

July 22, 2009

Thieves that prey together

The Brooklyn Paper, Police Blotter
by Mike McLaughlin

The once-devoid-of-any-criminal-activity Atlantic Terminal Mall was a crime scene last week.

Ax not

Thieves stole several guitars from a music store in the Atlantic Terminal Mall on two occasions last week.

Police were called to the Guitar Center, which is on Flatbush Avenue between Hanson Place and Atlantic Avenue, on July 13 and July 16 after employees realized that six electric guitars and two acoustic pieces were missing.

article

Posted by eric at 1:00 PM

July 21, 2009

Forest City in the News

BisNow, DC Commercial Real Estate

Reminder: Tomorrow [7/21/09] is Bisnow's big Breakfast & Schmooze at the Reagan Building! Join two of real estate’s top figures, JBG’s Mike Glosserman and Forest City’s Debby Ratner Salzberg, with Senator Mark Warner, FBR co-founder Russ Ramsey, Clinton Budget Director Alice Rivlin, new Burke & Herbert CEO Hunt Burke, and top lobbyists to hear the latest on federal stimulus and the economy. Recession-busting prices! Sign up!

The Cleveland Leader, RTA Takes Us for the Wrong Ride

If you think that the Ratners have landed a sweet deal with the Metropolitan Transportation Authority, check out what they have going in Cleveland:

Despite the fact that these RTA [Regional Transit Authority] facilities help Tower City, RTA pays some $1 million a year to Forest City Enterprises, owner of Tower City. It’s annual fee for RTA’s use of space into Tower City. RTA pays an addition $32,000 to “reimburse” Tower City for central plant operations. It even pays a utility charge for use of the escalators! There’s room for negotiations here to lower costs.

Isn’t it time to renegotiate these fees lower since there’s less use and Tower City seems to always get reductions of its property taxes?

Posted by lumi at 4:49 AM

July 13, 2009

Forest City in the News

The Cleveland Plain Dealer, Years-long Terminal Tower renovation nearing completion

Forest City Enterprises, development company for Atlantic Yards, can do preservation and renovation when they want to.

At 79, Terminal Tower is older than Superman and may well be the first tall building he leapt in a single bound.
...
A years-long renovation project by its owners, Forest City Enterprises, is close to completion. An 80th birthday party, a year from this month, will showcase the work that has taken place since 1997 - a total makeover from top to bottom, inside and out. With a reverence for the classical interior and beaux-arts facade, every window and every elevator have been replaced, every surface has been repaired, replaced, polished or painted. All of this without disturbing the peregrine falcons that have nested on a 12th-floor ledge, or upsetting the ghost left behind by master plasterers above the main entry's majestic barrel-vaulted ceiling.

Associated Press, D.C. commercial property market resisting downturn

Even as the recession continues to squeeze commercial real estate owners across the United States, the impact on the nation's capital has been significantly less severe.

Washington's edge? Uncle Sam.
...
"Over (last) summer things started to go flat and got progressively softer," [Hessam Nadji, managing director at Marcus & Millichap Real Estate Investment Services] said.

Yet developers are forging ahead with new retail projects like The Yards, which will add 400,000 square feet for shops and restaurants. The 42-acre project is being built by Forest City Washington Inc. in the Capitol Riverfront district and also will feature some 1.8 million square feet of office space and 2,800 residences.

Posted by lumi at 6:01 AM

July 11, 2009

Forest City Enterprises (FCE.A) Organized Trend Formed: 22.4% Move in 57 Days

TradingMarkets

We're not the only ones noticing that the stock price is still slipping for the developer of the proposed Atlantic Yards project.

Forest City Enterprises (FCE.A) Organized Trend Formed: 22.4% Move in 57 Days 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 22.4% lower as of today's recent price of $4.88.

link

Posted by steve at 6:45 AM

July 7, 2009

Superstore Me: Guilt, Rituals and Red Bags

The NY Times
THEATER REVIEW | 'BEHIND THE BULLSEYE'
By Jason Zinoman

When Target opened in 2004 at [Bruce Ratner's] Atlantic Terminal Mall in Brooklyn, this Minnesota-based superstore, trying to fit in, threw an invite-only party where a D.J. and local celebrities (including Maggie Gyllenhaal and Lizzie Grubman) mingled among two floors of Gatorade, kitchen appliances and reasonably priced consumer goods.
...
Target has not attracted the controversy of the nearby Atlantic Yards project, which plans to add a stadium and a new skyline of towers to downtown Brooklyn. But for some locals it’s part of the out-of-scale corporate sheen that threatens the spirit of their leafy borough. Anxiety about this development is stylishly illustrated in “Behind the Bullseye,” an intimate Target polemic that looks like one of Reverend Billy’s nightmares staged by Robert Wilson on a budget.

article

NoLandGrab: Three Points

1. Target is in reality a designer big-box store, adding to developer Bruce Ratner's collection of superstores that now litter NY cityscape.

2. For more proof that appearances matter, one could say that the Frank Gehry-designed Atlantic Yards project had not attracted the controversy as the off-the-shelf Atlantic Yards project Bruce Ratner is now proposing.

3. The Times should know by now, it's an "arena," not a "stadium."

Posted by lumi at 5:31 AM

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.

article

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.

article

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.

link

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.

article

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.

article

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.

article

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.

link

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.

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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.

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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.

article

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."

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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

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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.

link

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.

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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.

link

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.

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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.

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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.

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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.

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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)...

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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:

http://stapletondenver.com

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

link

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.

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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.

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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."

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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.

article

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?

link

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."

article

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.

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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.

article

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 call

Last 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."

link

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.

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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]

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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.

link

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."

article

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.”

article

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.

article

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.

article

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."

link

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.

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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).

article

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.

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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 Boyles

Forest 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.

article

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.

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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.

article

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.”

article

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.

link

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.

article

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.]

link

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."

article

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 Thom