Skip to main content

FAQ: Background/fact-checking on Atlantic Yards/Pacific Park

This page, which is a work in progress, will attempt to provide links and data for journalists, academics, and those looking for background information on Atlantic Yards (disingenuously renamed Pacific Park in 2014). Sure, I'm a critic of the project. But I'm a reporter first, and my analysis is grounded in facts. Statements by project supporters--and, yes, opponents--should be fact-checked as much as possible.

Here's a timeline (from Battle for Brooklyn and MetroFocus), not linked to my coverage, but useful nonetheless.

Some common mistakes in Atlantic Yards coverage, such as:
  • the name Atlantic Yards
  • it's "over the railyards" placement
  • the "Downtown Brooklyn" location
  • the "rezoning" and city approval
  • the "same site" Walter O'Malley sought (CJR coverage)
Are Forest City Ratner's 2011 claims about new tax revenue, construction jobs, and permanent jobs credible? Nah.

Was the project initially planned to be an arena and housing? No. There were supposed to be 10,000 office jobs in four towers.

What about community outreach, and promises of local jobs and affordable housing? Forest City Ratner has not only not fulfilled the obligations of the Community Benefits Agreement, it hasn't even hired an Independent Compliance Monitor.

Would the project have eight acres of "park" space, managed by the city Parks Department? No, publicly accessible, privately managed open space. It would arrive, in increments, as the residential towers of the second phase are built, despite the claim that Pacific Park will have a "public park."

Originally, there was supposed to be public open space on the arena roof. That then became space for those in the towers around the arena. Now there's a big Barclays logo on the roof.

Why is a green roof coming? Not merely, as claimed, as some sort of public amenity. It's also aimed to tamp down noise escaping from the arena.

A FAQ as of 3/10/10, preceding the arena groundbreaking.

The 12/10/03 public relations packet, when the project was announced. How long was the project supposed to take? Ten years. That was repeated in 2006, and 2009, until, in 2010, Bruce Ratner claimed it was never supposed to be the timetable. Now the timetable is supposed to be 2025.

A visual history of Atlantic Yards renderings, as of March 2010.

What was on the site previously? Go to Tracy Collins's map, and photos.

Subsidies and benefits

How much is Forest City Ratner getting in direct government aid and tax breaks? It's complicated. No one's been able to do a full study.

For the arena alone, the New York City Independent Budget Office in 2009 estimated a benefit to Forest City of $726 million in a combination of direct city and state subsidies, and city, state, and federal tax breaks. Given a smaller amount of tax-exempt bonds sold, I'd adjust that benefit downward by about $50 million.

However, city and state agencies backing the project said the IBO was wrong in not calculating the impact of the whole project (which the city agency said was impossible to do).

I'd add that the IBO left out the $200 million-plus value of the naming rights, which the state gave away. No one has counted the naming rights as a subsidy, though a state official once said that it was part of the financing for the arena.

And no one's yet specified the value of housing subsidies needed for all the "affordable housing."

How much direct aid did the city and state promise when the project was announced in December 2003? None. The project, Bruce Ratner said, would be funded out of "incremental revenues." In a February 2005 Memorandum of Understanding, the city and state each promised $100 million.

Only after the project was passed in 2006 did the city announced additional subsidies: apparently $105 million, as claimed by Forest City.

The city now claims its total subsidies are $179 million or $171.5 million, not $205 million. Maybe. But we do know that Forest City Ratner's seemingly generous payouts for property owners relied on public funding from the city.

What other benefits are there? An override of zoning, which allows Forest City to build much bigger than allowed.

Does Forest City save $2 billion on building the arena, as the Post once reported? Probably not, but consider that, if  Assemblyman Richard Brodsky was correct in arguing that the PILOTs (payment in lieu of taxes) plan meant that Yankee Stadium was thus fully subsidized, so too could the argument be made for the Atlantic Yards arena.

The 2009 re-approvals and more savings

The project went through two re-approvals in 2009, saving the developer well over $100 million.

Instead of paying $100 million cash for the MTA's Vanderbilt Yard, Forest City got the agency--controlled by the mayor and governor--to agree to accept $20 million for the portion needed for the arena. The developer could pay the $80 million equivalent for the rest of the railyard over 21 years, at a gentle 6.5% interest rate. That's a savings of tens of millions in interest.

Beyond that, the agency agreed to accept a smaller replacement railyard. Yes, costs had risen, but the developer got to save about $100 million.

What drove the timetable? Forest City's need to get tax-exempt bonds issued by the end of 2009.

The Empire State Development Agency re-approval in 2009 allowed for eminent domain in two or more phases, thus saving Forest City from paying out cash to buy property it did not need for a long time--or, possibly, ever. Beyond that, it allowed the developer to pay some of the developer's soft costs and speed up a transfer of funding.

So the developer saved on direct spending (the railyard), as well as cash flow.

The Vanderbilt Yard

How much was the railyard worth? (Remember, it's the key public property, 8.5 acres, that's part of the 22-acre site.) The appraisal was $214.5 million (with the cost of a replacement yard subtracted). Forest City bid $50 million in cash, while Extell--the only other bidder, given that it was seen as a done deal--bid $150 million.

Forest City, however, contended its overall bid was far more valuable. The MTA Board, controlled by the governor and mayor (who already had announced support for Forest City's project), chose to negotiate only with Forest City, which upped its cash bid to $100 million. Extell never had a chance to revise its overall bid.

Four years later, Forest City successfully renegotiated the deal, paying $20 million for the part of the railyard it needed for the arena, the rest of the $80 million at a gentle interest rate, and building a smaller (rather than larger, as originally promised) replacement railyard. I contended that the MTA actually had the upper hand, but a judge disagreed.

EB-5 immigrant investor funds

What's one of the biggest unreported stories? How about Forest City Ratner's dubious use of the EB-5 program to recruit immigrant investors and Borough President Marty Markowitz's shilling for it.

How much did Forest City save on raising $200 million-plus in low-interest financing, which was aided by the city and state of New York? (The original goal was $249 million, though that sum has not been confirmed.) Maybe $100 million, maybe more, maybe less.

Affordable housing

How affordable would the affordable housing be? The projected rent has long dismayed housing seekers, such as at a 2006 affordable housing information session. Perhaps half the units would be for "the real Brooklyn." A good chunk would be close to market rate.

And while promising that half the affordable units, in terms of square footage would be geared toward families (with 2BR and 3BR units), Forest City has backed off that pledge.

When was the first tower supposed to break ground? Late 2010. How many times has Forest City moved the goalposts? At least eight times.

Modular construction

What about Forest City's plans for modular construction? I think there are many questions, including the astounding admission that Forest City's long-promised plans to build towers with union labor were never viable.

The p.r. push

Who's paying for most of the playgrounds refurbished by the Barclays Nets Community Alliance? Not the alliance sending out press releases.

Were there 35 lawsuits, as Forest City likes to say? No.

Is the Nets CEO trustworthy? Listen to Brett Yormark, remixed.


Is SHoP the arena architect? No, just the facade architect. Ellerbe Becket/AECOM is the arena architect. SHoP is now working on the plaza and the first towers.


How many arena suites were there supposed to be? How many are there now? What percentage have been sold? When did they first go on sale? The numbers, of course, keep shifting.

Naming rights

Were arena naming rights worth closer to $400 million, or $200 million? Actually, the latter.

Eminent domain

Is the Atlantic Yards site truly blighted, a prerequisite for eminent domain? Very very very dubious.


How long was the project supposed to take? Ten years. How much time did the state give Forest City? 25 years.

When is the arena supposed to open? Sept. 28, 2012. When will the building be substantially complete? About three weeks earlier. Isn't that cutting it close? Yes.

What about the completion of the Carlton Avenue Bridge? Late September, contrary to Forest City's statements. Isn't that cutting it close? Very close.

Was KPMG's 2009 report for the Empire State Development Corporation, claiming the project could be built in a decade, trustworthy? No.

Should Forest City's statements be fact-checked? Yes. Consider op-eds by Bruce Ratner and MaryAnne Gilmartin, as well as Ratner's astounding 2010 admission that the project was never expected to be built in the promised ten years.

Arena financing and cost

This is a partial accounting. The main financing vehicle, according to the Offering Statement, is $511 million in tax-exempt in bonds. There's also $78 million from Mikhail Prokhorov (now $103 million).
Arena Project costs including site preparation costs, hard costs, soft costs and contingency which total approximately $807.1 million and Arena Infrastructure costs which total approximately $97.2 million.  Total Arena Project costs will thus equal approximately $904.3 million. Of the approximately $904.3 million of total Arena Project costs, approximately $156.5 million has been contributed as of October 31, 2009, which amount includes $85 million in funds received under the City Funding Agreement. As of November 1, 2009, approximately $747.8 million in costs will be required to complete the Arena Project (approximately $655.8 million are Arena costs and approximately $92.0 million are Arena Infrastructure costs).  Of the  approximately $655.8 million of remaining Arena costs, approximately $481.3 million are covered by the provisions of the Arena Design/Build Contract (exclusive of approximately $3.3 million which has been paid to the Arena Design/Build Contractor). The approximately $481.3 million covered by the  Design/Build Contract includes approximately $19.7 million of contingency.  Furthermore, there is an additional Arena Project  contingency in the amount of approximately $33.4 million. Contracts have not yet been entered into for the construction of the Arena Infrastructure. 
Where's the rest of the funding coming from? Maybe some of the EB-5 monies, as well as additional city funding, plus equity.

Here's a graphic from the latest Site Observation Report:
The AY landscape

Develop Don't Destroy Brooklyn fought to stop the project, BrooklynSpeaks to modify it. Both joined in a lawsuit--ongoing, with a victory by the plaintiffs--to force the state to study the impact of 25 years of construction.

Atlantic Yards Watch monitors construction impacts.

Empire State Development (aka Empire State Development Corporation) oversees the project, with an Atlantic Yards page. Developer Forest City Ratner, part of Forest City Enterprises, has an Atlantic Yards site that now says Pacific Park, given the 2014 partnership with the Chinese government-owned Greenland Group (Greenland Forest City Partners).

Forest City (with Mikhail Prokhorov's Onexim Group as minority partner, owning 45%) operates the Barclays Center and co-sponsors a Barclays Center site.

No Land Grab, until the arena opened in 2012, tracked all Atlantic Yards-related news and blog mentions, with the frame suggested by its name. NetsDaily tracks Nets-related news, with a decided enthusiasm for the new Brooklyn arena and disdain for Atlantic Yards "critics."

Photographer Tracy Collins has chronicled both changes in the neighborhood and project-related events. Photographers Adrian Kinloch and Jonathan Barkey also have shot many Atlantic Yards-related events.

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…