Forest City's Atlantic Yards Project Approved By State Board.

CLEVELAND -- Forest City Enterprises, Inc. (NYSE:FCEA) and (NYSE:FCEB) today announced that New York's Public Authorities Control Board (PACB) unanimously approved the Company's Atlantic Yards project, a mixed-use development in downtown Brooklyn whose main attraction is expected to be a new sports and entertainment arena for the Nets NBA basketball team.

The three voting members of PACB, representing the governor, Senate and Assembly, unanimously authorized public financing for the project. Based on the Board's vote, government agencies are expected to provide tax-exempt bonds and subsidies to help finance the project, thus completing the public review process for Atlantic Yards.

Charles A. Ratner, president and chief executive officer of Forest City Enterprises, said, "The Public Authorities Control Board's action enables the Atlantic Yards project to move forward in a mutually beneficial public/private partnership. Our goal is to create a dynamic commercial and recreational destination complementing vibrant residential neighborhoods. This project will create jobs and help make Brooklyn an even greater place to live, work and play."

Atlantic Yards is a long-term development project that is expected to include an arena to be developed by Forest City and designed by world-renowned architect Frank Gehry. Other uses are anticipated to include retail, office, apartments, and parks and open space. The arena would become an integral part of the local community, hosting local sporting events, concerts, family entertainment, and corporate and special events, in addition to serving as a professional sports complex and an international entertainment destination. Forest City is the principal owner of the Nets.

Corporate Description

Forest City Enterprises, Inc. is an $8.5 billion NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States.

Safe Harbor Language

Statements made in this news release that state the Company or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, real estate development and investment risks, economic conditions in the Company's core markets, reliance on major tenants, the impact of terrorist acts, the Company's substantial leverage and the ability to service debt, guarantees under the Company's credit facility, changes in interest rates, continued availability of tax-exempt government financing, the sustainability of substantial operations at the subsidiary level, significant geographic concentration, illiquidity of real estate investments, dependence on rental income from real property, conflicts of interest, competition, potential liability from syndicated properties, effects of uninsured loss, environmental liabilities, partnership risks, litigation risks, risks associated with an investment in a professional sports franchise, and other risk factors as disclosed from time to time in the Company's SEC filings, including, but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2006.