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BROOKLYN     Press Release Main Page

For Immediate Release: July 25, 2005

Extell Bids $150 Million vs. Ratner's $50 Million for the MTA's Rail Yards in Brooklyn
DDDB Demands That MTA Deliberate for More Than Two Days
And Postpone Vote Until Next Meeting in September

NEW YORK, NY -- The Metropolitan Transportation Authority released the two bids on Atlantic yards late Friday afternoon. Extell Development Company has bid $150 million in cash for the MTA's Vanderbilt Yards (aka Atlantic Yards), while Forest City Ratner Companies (FCRC) has bid $50 million for the same 8.4-acre property. Extell has bid $56 per square foot, while Ratner has bid $15 per square foot. The MTA, also on Friday, appraised the Vanderbilt Yards at $214.5 million.

"The community prefers the Extell proposal by a large margin as it fulfills the key principles we have been fighting for over the past two years. And now Extell has outbid Ratner by a very large margin," said Develop Don't Destroy Brooklyn (DDDB) spokesperson, Daniel Goldstein. Goldstein added, "The MTA should take time to deliberate and evaluate the two bids, especially in light of the fact that both of the bids fall below the MTA’s appraised value of $214.5 million. They should not rush to vote this Wednesday, bur rather postpone their vote until their next meeting in September. If they vote on Wednesday, Board members will only have two days to evaluate these two bids and that is an insufficient and ludicrous amount of time. With the Hudson Yards bids the Board deliberated for ten days, and that was insufficient. Whatever the Board decides to do, it must be fair, transparent and judicious. The public will not accept secret, sweetheart deals."

FCRC has tried to muddy the waters regarding their purchase price for the rail yards by tacking on construction costs, sales tax revenue, and operating costs to their $50 million cash offer. Extell has simply stated that they will pay the MTA $150 million in cash at closing, while choosing to absorb the costs for the "add-ons" that FCRC has marketed as part of their purchase price.

Goldstein continued, "As we've expected for a long time now, Mr. Ratner thought he could get away with a sweetheart price for the rail yards, so he low-balled his bid and then tacked on construction costs as part of his purchase price. Mr. Ratner's 'add-ons' add nothing to his purchase price, as both developers are offering to fulfill those commitments."

Besides the $100 million difference between the two purchase prices, the proposed projects are vastly different. Extell proposes 11 buildings over the 8.4-acre Vanderbilt rail yards, ranging in height from 4 stories to 28 stories. They will not use eminent domain and they intend to go through the City's community and political development oversight process known as ULURP (Uniform Land Use Review Procedures). Extell also plans to build a school, as well as over 4 acres of public open space.

Ratner proposes to build over the Vanderbilt rail yards as well as an additional 13 acres currently consisting of private homes, businesses, and city streets. The private property would be taken through a State invocation of eminent domain. The Ratner proposal would overwhelm the community with 20 skyscrapers ranging from 40 stories to 60 stories, as well as a 20,000-seat sports arena. Ratner's proposal would completely bypass City oversight, with a State takeover of the project.

Both developers offer 30% affordable housing. FCRC, as stated at a City Council hearing, plans to build a total of 7,300 units, with 2,250 designated as affordable. That is a 30% plan, not the much touted but false 50% plan.

Here is how the bids stack up.

3:1 For every dollar that Ratner has offered the struggling MTA, Extell has offered three.
Total Purchases Prices for Vanderbilt Yards (aka Atlantic Yards)
Cash Amount:   $150 million $50 million
FCRC claims the following line items as part of their purchase price, when in fact, they are costs that any developer would have to bear to build on the site.  Extell budgets these items as part of their construction costs.
Estimated Payment to MTA for Net Operating Increases over 50 years (PV)   $25.4 million
Construction of New Vanderbilt Yard   $182 million
Environmental Remediation & Clean-up   $20 million
Construction of Mass Transit Improvements   $29 million
The Estimated Revenues to the MTA from Sales Tax are purely speculative and is not part of the "purchase" of the yards.
Estimated Revenues to MTA from Atlantic Yards Sales Taxes (PV)   $23 million

Total Purchase Price Offered:

$150 million
($56/sq. ft)
$329.4 million
$50 million
($15.15/sq. ft)
Both companies have offered to cover platform costs, (likely with subsidies, as explained below).

For infrastructure costs Extell anticipates direct subsidies of $150 million, while FCRC anticipates direct subsidies of $200 million. However, in addition to the $200 million, FCRC also expects an unspecified amount contributed by the City and State towards their "extraordinary infrastructure costs", as described in 8ii) of the MoU between the ESDC, City and FCRC. The total "extraordinary infrastructure costs" are shown to be $163,000,000 on page 2.3 of the FCRC bid. These costs include the platform amongst other items.

For more information on FCRC's direct and indirect subsidies, which total at least $1.6 billion, see www.dddb.net/subsidies/subsidy.pdf

DEVELOP DONíT DESTROY BROOKLYN leads a broad-based community coalition
fighting for development that will unite our communities instead of dividing and destroying them.
We oppose Forest City Ratner's "Atlantic Yards" proposal in Prospect Heights, Brooklyn.
Over 5,000 members.