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djsunyc
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May 16, 2009
Appeals Court Dismisses Suit Against Atlantic Yards
By CHARLES V. BAGLI
An hour after learning that a state appeals court had dismissed a major challenge to his long-delayed Atlantic Yards development project, the developer Bruce C. Ratner said he planned to break ground by October on an $800 million basketball arena for the New Jersey Nets in Brooklyn.
The 20,000-seat arena is only one piece of a proposed 22-acre development at the intersection of Flatbush and Atlantic Avenues that would include an office tower and more than 6,000 apartments, including as many as 2,250 for low- and middle-income families.
Given the anemic economy, the housing and the commercial building may have to wait for some time. But Mr. Ratner said he planned to complete the design for the arena, obtain final government approvals and issue the bonds for the project by fall.
“I’m honestly overjoyed,†Mr. Ratner, chief executive of Forest City Ratner Companies, said of the court decision, made on Tuesday and released on Friday. “This is a weight off my back.â€
Opponents of Atlantic Yards vowed to continue their fight and expressed skepticism that Mr. Ratner would get the financing at a time when lenders are refusing to invest in real estate projects. The opposition has yet to win a lawsuit, but it has delayed the project for more than two years.
In its unanimous decision, the Appellate Division of State Supreme Court, Second Judicial Department, upheld a lower court ruling rejecting a challenge to the state’s use of eminent domain to obtain properties for the developer from owners unwilling to sell. “It cannot be said that the public benefits which the Atlantic Yards project is expected to yield are incidental or pretextual in comparison to the benefit that will be bestowed upon the project’s private developer,†the ruling said.
Candace Carponter, the legal director for one of the opponents, Develop Don’t Destroy Brooklyn, expressed disappointment but not defeat. “The benefits the original project allegedly offered were negligible, at best, and with the changed economy they are now nonexistent,†she said in a statement. “Despite this setback, our fight against the improper use of eminent domain and against the Atlantic Yards project is far from over. Forest City Ratner may claim again, like the boy who cried wolf, that they will break ground soon. But they won’t.â€
Although the developer has demolished 35 buildings on the site, all work ceased in December. Developers throughout the city have found it nearly impossible to finance new projects, or have watched helplessly as lenders pulled out of developments in progress.
“The reality is that it’s a tough financing market,†said Marc Ganis, a sports business consultant who worked on the new Yankee Stadium deal. “It’ll cost more and there’ll be more restrictions. That said, I expect they’ll get it done. They already have contracts for substantial income.â€
Barclays Bank has signed a $20 million-a-year deal with the Nets for naming and advertising rights at the arena, which would be called the Barclays Center. Although many companies have backed away from sponsorships as retail sales have plummeted, Forest City Ratner said it had lined up eight other sponsors: MetroPCS, ADT, Anheuser-Busch, Cushman & Wakefield, EmblemHealth, Foxwoods Resort Casino, the Jones Soda Company and Phillips-Van Heusen.
The Nets, on the other hand, reported a pretax loss of $77.8 million for the year that ended Jan. 31. The developer hopes to move the team to Brooklyn from its current home at the Izod Center in New Jersey.
Forest City Ratner, which was the development partner for the new Midtown headquarters for The New York Times Company, may also benefit from the economic slowdown, which has substantially reduced the cost of construction materials.
In the last six months, Mr. Ratner has sought additional subsidies beyond the $300 million in cash and tens of millions in tax breaks already approved for the project. He has also said he wants to pare the projected $1 billion cost of the arena by about $200 million. He said he would decide within 60 days whether to keep the original design, by the architect Frank Gehry, or use another.
He said he hoped to erect the first residential building six to nine months after starting the arena. |
5/16/2009 1:58 PM
