In the world of public-private real estate deals, the word “renegotiation” has been popping up a lot lately.
The latest installment came early Monday afternoon, when the Metropolitan Transportation Authority announced a revised plan for the Atlantic Yards project on M.T.A. land in Brooklyn, for which the agency was once promised $100 million upfront and a $250 million new rail yard.
Developer Forest City Ratner, which intends to build a basketball arena for the Nets and thousands of apartments at the site, has renegotiated a deal with the agency to the point where it pays about $180 million less, at least at first.
Forest City would build a new rail yard for about $150 million with one-fourth less capacity than planned, and pay $20 million upfront. Over the next 22 years, according to the agreement, the developer would give payments worth $80 million in today’s dollars to the M.T.A.
The new deal, which is slated to be approved by the M.T.A.’s board Wednesday, comes as a stream of litigation since 2006 has delayed the start date for the project to a point at which the economy has changed dramatically. Forest City came back to the agency asking for relief from its promises. This left the agency in a tough position: If it refused to negotiate and scrapped the deal, it’s hard to think new bidders would line up with a better offer in this environment.
Monday’s announcement, made at a meeting of the M.T.A.’s finance committee, did include one new, if small, income stream: The agency agreed to lease the naming rights for the Atlantic Avenue station, where the project is based. With payments of $200,000 a year for 20 years, the new name: “Barclays Center,” which an agency official said will appear alongside the existing name for the station.