Yards grapples with court costs – Ongoing litigation puts bite on project pocketbook

By Stephen Witt

An affidavit from Atlantic Yards developer Forest City Ratner citing continued litigation as a rising risk to financing the project has opponents of the project feeling good about their plight. But developer Forest City Ratner Companies (FCRC) say they remain committed to the project. “Let’s be very clear, Atlantic Yards and the Barclay’s Center are coming to Brooklyn. Period,” said FCRC Executive Vice President Bruce Bender. “We remain totally committed to bringing the thousands of jobs, affordable housing units and a professional sports team to Brooklyn. Regardless what our opponents say, Atlantic Yards will be a reality,” he added. As first reported in the New York Post, FCRC Executive Vice President and Director of Finance Andrew Silberfein filed the affidavit to persuade the state Appellate Division to expedite the appeal of a state lawsuit filed by project opponents. The state Supreme Court ruled two weeks ago against the opponents’ claim that the environmental study of the project was flawed. Under current law, opponents have nine months to file the paperwork for an appeal. “As the court surely is aware, the credit markets are in turmoil at this time. Many lenders and bond insurers are facing financial difficulties, and are becoming much more cautious. It is not clear what the financial climate will be in several months, when the arena bond financing is made available to the public,” said Silberfein in the affidavit. Silberfein stated in the affidavit that while the lower court ruling should be helpful in providing comfort to potential investors, “there is a serious question as to whether, given the current state of the debt market, the underwriters will be able to proceed with the financing for the arena while the appeal is pending before this Court.” Bender alleged that opponents have lost over a dozen court decisions on the merits and have now decided to try to further delay the project through appeals. “While that’s their right, we’re confident that we will once again prevail in court,” said Bender. “But let’s be realistic here. Their [opponents’] goal is to delay the project in the hope that they can damage it, eliminating along the way the benefits to the surrounding communities, including the much needed jobs and affordable housing. “This scorched earth policy of anything goes to delay a development that has been reviewed, supported and approved by the state legislative leaders and an overwhelming majority of people in Brooklyn, is disappointing but not unexpected,” he added. Develop Don’t Destroy Brooklyn spokesperson Daniel Goldstein responded the lawsuits are not aimed at stalling the project, but stopping it. “Our reasons for that are clear. The project is disaster for the 10 great neighborhoods surrounding the project site, a bad plan for Brooklyn, and a bad deal for city and state taxpayers. If the time required for litigation jeopardizes its success, from Ratner’s point of view, because of the added costs or inability to get financing, that just demonstrates the lack of capital behind the project and its shaky financial foundation,” said Goldstein. “We cannot control how long the courts take to make a decision, we want them to move as quickly and fairly as they can—but we are not going to sit back and give up our legal rights. Forest City Ratner has always known there would be litigation, and they should have planned for that process,” he added. But Bender maintained that FCRC has been part of Brooklyn’s economic growth for over 20 years and has successfully developed throughout many different market cycles. “We remain completely committed to making Atlantic Yards and its numerous benefits a reality for everyone,” he said.