Forest City Enterprises and Greenland Holdings Group, a Chinese state-owned developer, have completed an agreement for a joint-venture to develop Atlantic Yards, the companies announced today.
The two parties had previously announced a preliminary deal in October under which Greenland would acquire a 70-percent stake in the Atlantic Yards project from Forest City. Expected to close in 2014, the joint venture includes phases one and two of the project, excluding the Barclays Center and the B2 modular housing tower.
Under the terms of the deal, the Greenland Group will make a capital contribution to reimburse Forest City for costs incurred. Forest City Ratner Companies, Forest City’s New York subsidiary, will manage day-to-day activities associated with the project.
“This agreement is an important step forward for Atlantic Yards. We look forward to welcoming Greenland Group as a partner and applaud their commitment to affordable housing, their dedication to the future of Brooklyn and New York, and their confidence in ForestCity,” said David LaRue, president and chief executive of Forest City. “Securing strategic partners to invest with us to activate development and create long-term value is a key strategy for Forest City.”
In August, Forest City Ratner announced that it was seeking a majority investment partner to invest up to $800 million to help make the Atlantic Yards residential development in Brooklyn a reality.
The residential project will feature roughly 6,400 apartments, across 22 acres, roughly 2,400 of which will be designated as affordable housing.
“With this definitive agreement in place, we are a major step closer to delivering more expeditiously the affordable housing and other benefits of Atlantic Yards to Brooklyn,” added Bruce Ratner, executive chairman of FCRC, in the statement.
Just last week, a regulatory filing indicated the Atlantic Yards project was valued less than original projections. The $500 million investment made by Forest City is now estimated to be worth just half that amount, according to a report in The Wall Street Journal.
The company plans to write-down $250 million to $350 million on the development due to higher-than-expected costs. The step is linked to Forest City’s deal with Greenland Holdings Group, the Journal reported.
Representatives of Forest City could not be reached for comment.