December 18, 2008

Nets arena architects get the ax

Frank Gehry, who's still allegedly designing the Atlantic Yards project that New Jersey Nets owner Bruce Ratner is allegedly building in Brooklyn, has laid off his entire architectural team working on the project. The reason? Ratner "refused to pay Gehry additional costs for design revisions," according to a source cited in the New York Daily News. Asked whether there was still design work left unfinished, a Ratner spokesperson told the News: "The answer is yes, of course there is design work left to be done, and, no, there are no new images to release." Maybe they can get some interns to design it.

Meanwhile, the New York Observer reports that whether Atlantic Yards will ever be built is "very much an open question":

Bruce Ratner, the Brooklyn-based cousin of Chuck Ratner who runs Atlantic Yards, seems to be rushing to patch a leaky dam. According to multiple people familiar with discussions, his subsidiary company, Forest City Ratner, is attempting to cobble together extra money; trying to speed up tens of millions of dollars it is owed by public entities; delay tens of millions in payments it owes to both the public and private sectors; and tack on new subsidy programs for the housing piece of the project. Earlier this month, Bruce Ratner abruptly shut down preliminary construction efforts related to the NBA arena in an apparent attempt to preserve cash.

At a glance, Atlantic Yards would certainly seem a prime candidate for collapse. The project had an unusually low margin of return back in 2006 - according to state and Forest City figures from the time, at the height of the real estate boom - as Mr. Ratner slathered on promises and concessions in an attempt to win political support. Since, several key assumptions changed in Mr. Ratner's disfavor, surely challenging the project's financials.

Ratner is also reported to have told investors during a conference call, "When we get - and we believe we will - successfully through the last of the litigation in 2009, we'll evaluate the market at the time, and see what our next steps are." Sounds like "down the drain" is looking more and more accurate.