The Wall Street Journal has a revealing interview with Forest City Ratner's
newly promoted president, Joanne Minieri.
Note her barely concealed panic about the credit markets. And note her inability
to speak honestly about the company being behind its own planned schedule--FCR's
schedule called
for the entire arena block to be demolished and leveled (or "cleared"
as the euphemism goes) by July, that's last July. As of today a small
percentage of the arena block has been "cleared" while the rest is still
an active rail yard, city streets and private homes/businesses. (The Atlantic
Yards Report's Norman Oder has written extensively on the company's unwillingness
to admit that they are delayed and that their arena cannot possibly open for the
2009 season. He has covered that fudging most clearly here,
here,
here
and here.)
The whole interview also validates Assemblyman Jim Brennan's (and many others')
expressed
concerns that much of, if not all of, the project's "affordable"
housing will never be built.
It all amounts to a fragile financial situation for Forest City.
From the Wall Street Journal:
Forest
City's Minieri Gets Tested in New York
Brooklynite Executive Steers Big Atlantic-Yards Project Amid Tough Credit
Market
By
Alex Frangos
Real-estate developer Forest City Enterprises, best
known for large-scale, mixed-use developments around the country, recently promoted
Joanne Minieri to president of its New York division from chief operating officer,
making her one of the highest-profile women in real-estate development.
She will report to Bruce Ratner, chief executive of Forest City
Ratner Cos., Forest City's New York branch. Ms. Minieri, 47 years old, a Brooklyn
native, talks about her career, credit markets, and the ambitious -- and controversial
-- set of projects she's now in position to lead into fruition.
...
WSJ: Given your financial background, does the stress
in the credit markets keep you up at night?
Ms. Minieri: The availability of capital to do these terrific developments and stimulate the economy concerns me. As terrific as doing development is, when you create jobs that stimulate the economy, create neighborhoods, you need to keep the asset a feasible investment for all our customers, including our shareholders. Liquidity and the availability of funds is always something I try not to lose too much sleep over, but it can keep me up at night. Value creation is impacted tremendously when you have to pay more for financing proceeds.
WSJ: What effect do the current credit markets and housing softness have on projects such as Atlantic Yards in Brooklyn [a development that will include 16 skyscrapers with 6,400 housing units, offices and shopping as well as a new arena for the New Jersey Nets basketball team]?
Ms. Minieri: We will probably encounter a couple of different market cycles as we move through that development. We think it's a tremendous opportunity to help the economy to revitalize the neighborhood -- all the things we like to do in our development projects. We are on the site now, doing some work. We are waiting for the conclusion on some of the litigation. We are proceeding according to plan.
"Revitalize the neighborhood," huh? Proceeding "according to plan," huh?
Norman Oder comments on this over at his Atlantic
Yards Report:
...Atlantic Yards is hardly the savior of a "blighted" neighborhood. An open
bidding process for the Metropolitan Transportation Authority's Vanderbilt Yard
would have ushered in development over the working railyard that separates neighborhoods.
Market-rate development has been proceeding apace; a rezoning could have unlocked
new development possibilities and required affordable housing. Instead, we get
a state override of zoning--essentially a private rezoning.
Also, while the developer may be working on preconstruction demolition and other
site preparation, the project is about
a year behind plans as announced in last year's environmental review, and
several years behind plans as announced in 2003. (The arena was supposed to open
in 2006!)...
WSJ: How does it feel to work on a major Brooklyn project such as Atlantic Yards?
Ms. Minieri: I can't tell you how it really feels to be
a Brooklynite and to be part of a company that's done incredibly historic
things ... It gives me the goose bumps.
...And some incredibly anti-historic things like demolishing the Ward
Bakery Building and wiping out a mixed-used neighborhood. But it's true, the
company has done some "historic things" like: pushing forward
the biggest real estate boondoggle in Brooklyn's history, using
Liberty Bonds to build a national chain mall in Downtown Brooklyn and trying
to get them for the new
NY Times tower, staking a claim as the biggest
lobbyist spender in the real estate industry in 2006, and of course,
the company's "modern
blueprint" for fabricating public support.
It gives us goose bumps too.
WSJ: There are three lawsuits outstanding against Atlantic Yards, two concerning the use of eminent domain, and one challenging the environmental-impact statement. How much longer before the delay has an impact on the bottom line?
Ms. Minieri: We can't see the future and we don't know
certain things. Obviously we expect the decisions soon. We anticipated the lawsuits
and we are committed to moving forward.
...
WSJ: You meet periodically with your Forest City colleagues doing
major projects around the country. What are you hearing about the health of
the market nationwide?
Ms. Minieri: I think everyone is being very cautious. There's uncertainty in the markets. So we stay very focused on the markets and how they impact our business. I think everyone is sort of hearing the same thing -- kind of a wait and see.
WSJ: What's your impression of the health of the New York market?
Ms. Minieri: The New York market is a tough market. We've had some terrific years, I see it as beginning to normalize. Obviously we are very cautious because these are uncertain times. As you know we have some unemployment, job layoffs coming. It's a core market for our company. We are invested here and we'll continue to be a part of New York.
Full
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