The Latest from Ratner: ‘Challenges Remain’ for Arena, Nets Revenues Down
Eliot Brown Dec. 9, 2009, 8:21 a.m.
The latest quarterly filing from Forest City Enterprises–parent company of Atlantic Yards developer Forest City Ratner–is in, and there’s a few points worth noting:
-The company’s efforts to start construction on the Nets arena faces another previously unreported hurdle: Forest City stopped sending in required payments on a $162 million loan–the mortgage on its property for the $4.9 billion Atlantic Yards project, of which the Nets arena is a part. While Forest City didn’t provide immediate explanation, the move appears to be another display of the penny-scrounging that’s been going on over the project (the company is negotiating sped-up subsidy payments from the city, along with payment of infrastructure money). The company said it missed a $5 million payment on the loan, and had been granted an extension until Dec. 10, which it was negotiating. (The Atlantic Yards Report has more on the risks, which Forest City is required to report.)
-Through Oct. 31, well before the Nets achieved their current 1-19 record, revenue for the team was down $10 million for the same nine-month period from the year before (expenses dropped by $10 million as well). Last year, Forest City reported $59 million in revenue at the time, which itself was down slightly from $62.8 million in 2006. Pre-tax losses were mostly stable at $53.6 million (compared with $54 million last year), of which Forest City’s share is $33.1 million.
-Should the Atlantic Yards project collapse, according to the filing, Forest City estimates its costs would be $580 million, including repaying subsidies, writing off investment, and restoring the M.T.A.’s rail yard.
-A press release notes that “challenges remain” for the project, though its overall tone is optimistic. After all, the number of barriers for the development are indeed falling, and Forest City has been on a “road show” in recent days in an attempt to find buyers for $500 million in tax-free bonds, one of the last major hurdles remaining.