Barnett 3, Ratner 1

This is getting interesting. The MTA released the bids for the Vanderbilt Yard (a.k.a. Atlantic Yards) over in Brooklyn and it looks like the maverick Extell Development Co., run by Gary Barnett, outbid the Mayor’s favored player, Forest City Ratner. Extell is offering $150 million in cash, compared to $50 million offered by Forest City.

Forest City is using the number $329.4 million, though, in a press release, which includes money for environmental clean-up, construction of a new train yard to which the MTA would move its operations, and the sales tax that the development will bring to the MTA over the long haul. (A portion of your sales tax goes to the transit authority, but Ratner may be exempted from sales tax on construction materials, per a deal with the city and state reached in February.)

Forest City would also use $200 million in public subsidies for its sprawling residential-commercial-retail-basketball complex, about half of which would be used for the blocks surrounding the rail yard, versus $150 million for Extell’s more modest residential and retail set-up, which would be confined to the area over the yard itself.

Both bids low-ball the official MTA appraisal of the property, also released today, which comes in at $214.5 million, which takes into the account the $56 million or so the appraiser expects would have to be spent to make that rail yard, which is really just a trench in the ground right now, worthy of development.

“We submit this proposal with full awareness that the city of New York has conditionally, and to our mind, prematurely, designated another developer for construction of a massive arena on a portion of this site,” Barnett wrote in his cover letter to the MTA.

Forest City’s bid opens with quotes from Pataki, Bloomberg, and Marty Markowitz, and letters from Chuck Schumer and many others.

More on this coming…

– Matthew Schuerman

Barnett 3, Ratner 1