Thursday, April 16, 2009

Arena, 2012? New 2010 groundbreaking estimate suggests even that date may be cutting it close

(This is one in an irregular series of articles about issues that a State Senate committee might address when it holds a hearing on Atlantic Yards.)

Just two weeks ago, Forest City Enterprises announced that the Atlantic Yards arena would be one of two projects to go forward this year. A day later, officials told investment analysts that "when we have cleared the legal hurdles, we are prepared to move forward with the first phase of development at Atlantic Yards."

They didn't predict a timeline, but now we know that groundbreaking is unlikely this year. And that means that the developer's predictions of a 2011 arena opening date--which I've long questioned--are extremely dubious.

Yesterday, it was revealed that Empire State Development Corporation (ESDC) CEO Marisa Lago predicted that construction jobs be generated in 2010, thus indicating that groundbreaking would occur then.

Her prediction is hardly guaranteed, but it assumes that no legal hurdles remain, that bonds can be sold, and that the Department of Finance assessment on the arena land is sufficiently high to generate phantom foregone taxes that can be used to pay off the bonds via PILOTs (payments in lieu of taxes).

How long to build?

How long would the arena take to build? Let's say, for example, that arena construction begins in February. Should the arena take 24 months, as with many arenas around the country, the arena could indeed be finished well in time for the 2012-13 basketball season, which begins in October.

But what if the arena takes two-and-a-half years to construct, as Forest City Ratner CEO Bruce Ratner has said? That would get the arena finished in August, again early enough for 2012.

And what if the arena takes 32 months to build, as indicated in the Final Environmental Impact Statement, according to my reading. That would push an opening date until early October--and any delay in groundbreaking could jeopardize that opening.

Need for clarity

So, when the ESDC announces a new timetable for the project, it should explain how and why the timetable for arena construction either matches or differs from the previous, intricate estimates.

And if the explanation is dubious, well, that should fuel questions at an oversight hearing.

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