Atlantic Yards delays rattle Brooklyn

TRD NEW YORK /
Mar.March 24, 2008 10:43 AM

The revelation of indefinite delays at the massive Atlantic Yards project marks the latest sign of trouble for Downtown Brooklyn and its surrounding neighborhoods, as the weakening economy and the credit crisis threaten to derail Brooklyn’s biggest mixed-use development ever.

The project had promised to deliver more than 1.6 million square feet of office space and 6,000 apartments to the area, but developer Bruce Ratner now says the Miss Brooklyn office tower won’t be built until an anchor tenant is found and that financing problems could delay the residential development. That follows a rocky month for Downtown Brooklyn, in which a separate Ratner tower has been cancelled and the 660-unit mixed income development planned by Gristedes owner John Catsimatidis at 162 Myrtle Avenue has been partially delayed.

Atlantic Yards’ most ardent supporters remained optimistic that it would be fully built at some point.

“The Atlantic Yards will play a critical role in establishing Downtown Brooklyn as one of the nation’s most exciting downtowns,” said Joe Chan, president of the Downtown Brooklyn Partnership. “We have great confidence in Forest City Ratner’s demonstrated ability to deliver large and complex projects under challenging conditions.”

Atlantic Yards has already been through years of delays brought on by several lawsuits. The main opposition group, Develop Don’t Destroy Brooklyn, plans to appeal to the U.S. Supreme Court next month over its eminent domain lawsuit. In February, a federal appeals court affirmed a lower court’s dismissal of the suit.

Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein says he believes Ratner’s revelation is the project’s death knell.

“We’ve never believed the project was financially feasible,” said Goldstein. “The project as proposed will never be built.”

Ratner has been through a tough stretch lately: he and the City University of New York recently scrapped plans for the Renzo Piano-designed City Tech tower at Jay and Tillary streets, which would have included 600 market-rate apartments and could have reached 1,000 feet. That project could have become the city’s tallest residential tower and Brooklyn’s tallest building.

Brooklyn Borough President Marty Markowitz remains upbeat about Forest City Ratner’s planned Nets basketball arena, which Ratner says will be built on schedule, as well as thousands of units of affordable housing that were promised, a spokesman said.

“I’m obviously disappointed that some of the key components of the Atlantic Yards project may not be completed on the timetable we had envisioned,” Markowitz said in a statement.

Ratner said in a statement that he remained committed to the project.

“Today’s business environment will not determine the final face of this project or deny the borough and the city its many benefits,” he said.

The 22-acre Atlantic Yards project is the most high-profile of several major commercial and residential developments in and around downtown Brooklyn.

The development has angered residents in the Prospect Heights and Fort Greene neighborhoods, with its tall towers and the use of eminent domain to raze several about 16 acres of property.

Another large residential project, Catsimatidis’ Myrtle Avenue development, has also been re-worked. Catsimatidis told The Real Deal that it will start on time, but will now be built in phases. He said the project was delayed by the credit crisis and his inability to get affordable housing bonds.

Miller Samuel CEO Jonathan Miller, said that before the credit crunch, Atlantic Yards appeared to be a done deal, but today’s cloudy economic climate raises serious doubts.

“I call these projects with ‘grand vision’ more difficult to enable,” said Miller. “The current environment for financing for this type of project is more difficult,” he said, adding, “It reduces the odds of [a project of] this kind of scale getting done.”


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