Ratner's Atlantic Yards dream set to come true.
As Real Estate Weekly went to press, its looked likely that the Metropolitan Transportation Authority would approve Ratner's plan, despite an 11th hour effort by rival developer, Extell, to snatch the site from him with a higher offer.
As the clock ticked on negotiations, Ratner gave in to the MTA's demand that he increase his bid, doubling it to $100 million. And, the New York City Independent Budget Office issued a positive report about the project's effect on the city's economy.
According to IBO, the creation of a Nets arena around the site boarded by Vanderbilt Avenue and Pacific Street is likely to result in $7.5 million in additional tax revenues annually over a period of 30 years. The MTA was expected to reach a decision on the project by yesterday (Tuesday). Because the Nets team will be moving to Brooklyn from New Jersey, a big part of the $28.5 million in total revenues would come from fans that will now spend their money in New York, the IBO found. The Forest City Ratner project will also include approximately 6,000 apartment units, 1.2 million s/f of offices space and 180,000 s/f of retail space, creating both permanent and construction jobs.
"We are, of course, very pleased that the Independent Budget Office has concluded that the Atlantic Yards project is a win/win for the city and state from a financial perspective," said Jim Stuckey, the Forest City Ratner project manager for the Atlantic Yards project, which was thrown into turmoil when a last-minute $150 million bid for the site was made by rival, Extell Development Company.
"As we have said all along, Atlantic Yards is about more than basketball. It's about affordable housing and jobs and creating a development that complements the borough and the surrounding communities."
According to Forest City Rather estimates, the arena and the mixed-use development surrounding it will bring in about $1.6 billion in revenues for the city and state over 30 years.
Mafruza Khan, associate director with the Pratt Institute Center for Community and Environmental Development, who has done studies on the ramifications of the Ratner project for the borough, said it was a good sign that Forest City agreed to offer the MTA more money. But she noted that tax revenues are not the only thing that should be considered in the MTA's ultimate decision.
"It's very good that the Extell proposal has generated this much pressure," Khan said. "At the same time, the financial means for MTA shouldn't be the only consideration--their [interests] should be balanced with community programs. And we still have concerns about other issues, including traffic mitigation."
Khan also noted that IDA studies generally don't factor in as-of-right subsidies that developers get for their projects, making their calculations less than precise. "The IDA does issue good reports, but having said that, I think than when you do true accounting you should [include] as-of-right subsidies because those are tax dollars and they should be counted," she said.
Forest City Ratner's only rival for the development bid, Extell Development Company, declined comment on the news, saying that they prefer to wait until MTA makes its final decision.
The company offered the agency $150 million to create 11 residential buildings, some retail and public spaces at the site.
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|Title Annotation:||Construction & DESIGN|
|Publication:||Real Estate Weekly|
|Date:||Sep 14, 2005|
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