Nearly three years after receiving a green light from the state government, the mega-Atlantic Yards development is entering a critical stage, as developer Bruce Ratner is rushing to secure financing and tie up loose ends before an end-of-year tax deadline.
On Wednesday, in releasing renderings of a trimmed-down, redesigned arena, Mr. Ratner said he planned to market to investors $700 million in tax-exempt bonds at the end of the month. While Mr. Ratner and his Forest City Ratner have expressed confidence that they will be successful in selling the bonds, the attempt seems a make-or-break act for the project, as everything rides on how the market responds to it. Without receiving such financing before a Dec. 31 Internal Revenue Service-imposed deadline, Forest City would have to finance with standard bonds subject to taxes, adding tens of millions of dollars to the price tag.
The new arena design—the first since Mr. Ratner announced he had dropped starchitect Frank Gehry from the project last June—is characterized by a wavy set of weathered steel bands that enwrap the structure’s exterior, weaving in and out of large glass windows that open views into the structure. At the arena’s head is a notable 80-foot cantilevered canopy that reaches out away from the entrance—a canopy that ultimately is planned to be replaced by an office building with a large base open to the public.
The design was made by institutional and sports specialist Ellerbe Becket, which said it has been working on the project since November 2008, and SHoP. SHoP was brought on in June, said principal Gregg Pasquarelli, the same month that saw vitriolic criticism of early arena renderings from government officials and The Times’ architecture critic. Mr. Ratner denied that SHoP—which is known for avant-garde design, along with highly distinctive building skins—was brought on as a response to the criticism, but rather he said he was looking to bring in an additional firm to enhance the design.
“SHoP is known as one of the best firms for design in the 21st century, and we wanted to get a firm that we felt was really futuristic in the design,” Mr. Ratner said. “They got together and collaborated to create what I would say—both inside and outside—design that is exceptional.”
In terms of process from here, Mr. Ratner said the total cost of the arena is between $800 million and $900 million, depending how the costs are counted, apparently leaving Forest City with a gap of up to $200 million to cover on its own, should it be successful in selling the bonds. Mr. Ratner said Forest City would use its own equity to do so, though he acknowledged he is looking for investors to put in new equity.
“We’ve had different investors that want to invest in this project, so we’re speaking to them now,” he said. “I would rather have investors.”
If Mr. Ratner’s timeline for the bonds stays on course, Forest City would be attempting to secure the financing while key litigation is still pending. Next month, the state’s highest court is slated to hear a challenge to the use of eminent domain for the project.
To mitigate the uncertainty from this, Mr. Ratner said the bond sale would call for money to go into an escrow account, pending the outcome of the various uncertainties.