Forest City Ratner is looking to compete for some of New York’s scarce tax-exempt bonds to finance a Frank Gehry–designed tower in lower Manhattan.
The 950-foot-tall tower, to be built on a parking lot between Spruce and Beekman streets, promises to be one of the flashiest—and most expensive—new buildings south of midtown: some 920 titanium-and-glass-clad apartments shooting up from a low-slung base just off the Brooklyn Bridge’s entrance ramps. But first, Bruce Ratner, Forest City’s C.E.O. and president, has to find the money to build it.
Loren Riegelhaupt, a spokesman for Forest City Ratner, said in a statement that work was beginning on a K-8 public school that will occupy the first five floors while the developer “continues to develop the program for the mixed-use tower.” He added that Mr. Gehry’s firm “is completing the architectural design of the building.”
The 74-story tower has gone through a variety of designs, concepts and financing plans since Mr. Ratner first won the parking lot in a bidding war in 2003. In 2005, the city’s Department of Education struck a deal to build a $65 million K-8 school at the base. The school’s opening was at first scheduled for fall 2008, but has been pushed back a year, according to department spokeswoman Margie Feinberg.
Ms. Feinberg said that the city would pay for the school.
Forest City was also promised $190 million in Liberty Bonds—granted by the federal government after Sept. 11 to stimulate construction—to finance a mix of rentals and condominiums above the school. But since then, Forest City has indicated that it is planning an all-rental building, according to documents on file at the city’s Housing Development Corporation.
One portion—presumably the top—would be entirely market-rate rentals and could be financed with Liberty Bonds, which continue to be reserved for the project. The middle portion would consist of mixed-income rentals, 20 percent of which would be priced for low-income households. The school would occupy the lowest five floors, along with retail and possibly a medical facility.
In a request filed last year with the H.D.C., Forest City said it was planning to apply for up to $450 million in tax-free bonds that would cover up to 750 of the units in the middle portion of the building. But the developer will have to wait in line for these bonds because the city largely depends on the state for tax-exempt bonding authority. The state has received billions of dollars in requests that it cannot accommodate this year.
“By the end of June this year, the H.D.C. is completely out of volume cap,” said Emily Youssouf, the president of the H.D.C. “[The developers] are trying to figure out their financing.”
Taken together, the $190 million in Liberty Bond financing, which was supposed to underwrite 720 apartments, and the $450 million in 80-20 financing, to cover 750 units, accounts for more than the 920 apartments that Forest City is planning. That means the developer has room to tip the balance toward more or fewer market-rate units depending on the various tax advantages.
Forest City has begun excavation of the site, although it has yet to receive approval for the tower plans from the Department of Buildings, according to a department spokeswoman. Plans submitted last April were quickly rejected because of “issues of noncompliance with the building and zoning regulations,” according to department spokeswoman Kate Lindquist. The developer submitted another set of plans in January that are the subject of ongoing discussions.
Rough designs filed with the housing agency show that the tower would have a large five-story base, on top of which a narrow column would rise to 950 feet—the second-tallest building downtown—with small setbacks on the 37th and 49th stories. Public plazas would border the tower on two sides.