First Vornado and now Forest City..
More from the ObserverForest City: All New Development On Hold (Except Atlantic Yards)
The word from the top brass at Forest City Enterprises, parent company of Brooklyn-based mega-developer Forest City Ratner, is the firm is suspending all new development. That is, except Atlantic Yards.
Forest City Enterprises president Chuck Ratner said in a conference call with investors and analysts that the financial crisis has forced the company to shift strategy from a development focus to a property operator focus.
“This strategy then says that we intend to put virtually all new development on hold until economic and market conditions improve meaningfully,” he said.
The company will not stop projects under construction already, Mr. Ratner said, nor will it halt Atlantic Yards, the more than $4 billion planned project that would build a new Nets basketball arena and more than 6,000 units of housing in Brooklyn.
Later in the call, he noted that over the last four years, the company has started an average of $800 million annually in new development projects. Those days are over. “With the exception of Atlantic Yards, we will start—in 2009, we do not expect to start more than one building,” he said.
Just how and when the company will be able to start the massive project, given the tumultuous economic climate, Mr. Ratner was unable to offer specifics.
“We continue to work with the public parties,” he said, doing some small preliminary work on the site (which apparently came to a halt last week). “I think we can successfully do that until we are prepared to start—I can’t tell you today when that day will be … it’s not a question of entitlement, it’s a question of the marketplace.”
Suffice to say, observers say financing for a $950 million arena would be a bit of a heavy lift in this market, to put it mildly.
Forest City has said it cannot try to secure financing for the arena until it closes on the rail yards, and in turn, it cannot close on the rail yards until it finishes litigation, which is due for a hearing in coming months.
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