New York, NY —
By now the Atlantic Yards project was supposed to be well underway, and the Brooklyn Nets were supposed to be in the middle of their first season in their new arena. But developer Bruce Ratner hasn’t broken ground or even secured the financing. Instead, he's exploring ways to cut the arena’s billion-dollar price tag. Ratner's already decided he won’t start the project’s marquee skyscraper, known as "Ms. Brooklyn," until he finds an anchor tenant. WNYC’s Matthew Schuerman takes a closer look.
ANDERSON: Somehow it is always colder in the building …
REPORTER: Leigh Anderson is a writer who has been living on the edge of a sunken rail yard for 10 years now. In 2003, she learned her 4-story apartment building was in the middle of a developer’s dream for a basketball arena and 16 apartment and office buildings, one stretching about 50 stories in the air.
ANDERSON: Okay, so this used to be a building and it’s now an empty lot.
REPORTER: About two years ago, Forest City Ratner began knocking down the empty buildings it owned, but left about a dozen standing. The landscape looks like a ghost town after the Gold Rush. But about 20 holdouts still lived where they always lived.
ANDERSON: This was supposed to be temporary during the period of construction, but now construction is totally halted, so we essentially have a big gaping hole where there used to be a bridge and a temporary bridge a block away, and nothing’s happening.
REPORTER: Anderson is part of the reason nothing is happening. She and other rent stabilized tenants sued the developer to block the seizure of their homes. They lost, but two other cases are still in front of judges.
Lawsuits always cause trouble for developers: not only do they challenge of a project, but they deter investors from loaning money. In the case of Atlantic Yards, Ratner has postponed issuing bonds for a full two years. Partly, Ratner thought no one would want the bonds until the lawsuits cleared. But now that the country is in the midst of a recession, few people want bonds period.
ANDERSON: I’m hopeful that the economy will finish what we have started in killing the project.
REPORTER: When Bruce Ratner bought the New Jersey Nets in 2004, this isn’t the way he imagined it.
RATNER: Our sense is that it will take about three years--it’ll take about three years--to build the arena.
REPORTER: Mayor Bloomberg was also optimistic at the time.
BLOOMBERG: Virtually, not 100 percent, this is New York, almost 100 percent support of this project just tells you, this is going to go through.
REPORTER: Even politicians representing liberal districts, like City Councilmember Bill DeBlasio, got on board. The project was larded with social benefits. One part of the proposal called for setting aside approximately 2,000 of the complex’s 6,000 apartments—about a third of the total—as rent-regulated units. Nine hundred of them would be reserved for families earning less than 36-thousand dollars a year.
AMBI: What do we need? Jobs. When do we want them? Now….
REPORTER: Forest City Ratner said it would employ 1500 construction workers a year while the complex was being built. And hundreds of people would work there once it was finished. But those benefits are being postponed too. The work stoppage in November has left supporters frustrated.
CALDWELL: First thing I thought was goodness gracious we have to wait another 6, 8 months, a year before the shovels go in the ground.
REPORTER: James Caldwell is the head of Build Brooklyn, a nonprofit job placement organization largely funded by Forest City Ratner. The group used to hold meetings every Tuesday evening so people could drop by.
CALDWELL: We was averaging somewhere in the neighborhood of 40-50 peoples coming in.
REPORTER: But Caldwell stopped the meetings last year because he didn’t know what to tell people who asked when work was going to start in earnest.
CALDWELL: If you keep trying to give them dates, sooner or later they will start saying, “Well, all he is doing is crying wolf. He really don’t know.” Then they will go back and tell their friends we don’t know if this will happen or not. We don’t want that word circulating in the community.
REPORTER: Caldwell says he has given up on predicting when work will start. Forest City Ratner maintains it will break ground this calendar year, but the company would not make any executives available for an interview. Nor would the Empire State Development Corporation, the state agency sponsoring this project.
A Bloomberg administration official, Seth Pinsky, wouldn’t speculate on when the project would be finished. But he says it will be–eventually.
PINSKY: The one thing that anyone who’s lived through the history of New York City real estate is that New York’s real estate market is cyclical and during the down cycles, everyone despairs that nothing is going to get built for decades and decades, and then the boom returns and things sprout up out of the ground.
REPORTER: But Atlantic Yards is a little different from other New York real estate projects. It was sold half as a private real estate development, half as social welfare. That’s how public officials justified the 300 million dollars in direct aid, and numerous other advantages, that government will provide for the project.
MARKOWITZ: For the thousand of folks, men and women …
REPORTER: Marty Markowitz, the Brooklyn borough president, was one of the most exuberant early supporters of Atlantic Yards, even though he played no formal role in its approval.
MARKOWITZ: …. I want to say, thank you.
REPORTER: The borough president still believes in Atlantic Yards. He blames opponents for pushing the project back into a bad economy.
MARKOWITZ: All I can say is keep the faith. That’s all I can say is keep the faith. Because in spite of the attempts by those who frankly couldn’t care whether you are getting your affordable housing or not, we are fighting the good fight against these kinds of odd that no one could anticipate.
REPORTER: Opponents contend the project wouldn’t have attracted so much litigation if it had been more responsive to the community’s objections. Rulings in two lawsuits are expected this spring, though there’s no telling what other appeals may be in store.
In the meantime, Ratner has to figure out just how long he can hold out, whether he can wait out the lawsuits, and the bond market. It looks like he will continue losing more than 20 million dollars a year so long as the Nets play in New Jersey. He is also fighting rumors that his star architect, Frank Gehry, has left the project. Officially, the company says Gehry is still on board, the Nets are slated to open in Brooklyn by the end of 2011, and the entire project will be finished by 2018.
For WNYC, I’m Mathew Schuerman