Immediate Release: July 25, 2005
Extell Bids $150 Million vs. Ratnerís
for the MTAís Rail Yards in Brooklyn
DDDB Demands That MTA Deliberate for More Than Two Days
And Postpone Vote Until Next Meeting in September
NEW YORK, NY≠ The Metropolitan Transportation Authority released
the two bids on Atlantic yards late Friday afternoon. Extell
Development Company has bid $150 million in cash for the MTA's
Vanderbilt Yards (aka Atlantic Yards), while Forest City Ratner
Companies (FCRC) has bid $50 million for the same 8.4-acre property.
Extell has bid $56 per square foot, while Ratner has bid $15
per square foot. The MTA, also on Friday, appraised the Vanderbilt
Yards at $214.5 million.
"The community prefers the Extell proposal by a large margin
as it fulfills the key principles we have been fighting for
over the past two years. And now Extell has outbid Ratner by
a very large margin," said Develop Don't Destroy Brooklyn (DDDB)
spokesperson, Daniel Goldstein. Goldstein added, "The MTA should
take time to deliberate and evaluate the two bids, especially
in light of the fact that both of the bids fall below the MTAís
appraised value of $214.5 million. They should not rush to vote
this Wednesday, bur rather postpone their vote until their next
meeting in September. If they vote on Wednesday, Board members
will only have two days to evaluate these two bids and that
is an insufficient and ludicrous amount of time. With the Hudson
Yards bids the Board deliberated for ten days, and that was
insufficient. Whatever the Board decides to do, it must be fair,
transparent and judicious. The public will not accept secret,
FCRC has tried to muddy the waters regarding their purchase
price for the rail yards by tacking on construction costs, sales
tax revenue, and operating costs to their $50 million cash offer.
Extell has simply stated that they will pay the MTA $150 million
in cash at closing, while choosing to absorb the costs for the
"add-ons" that FCRC has marketed as part of their purchase price.
Goldstein continued, "As we've expected for a long time now,
Mr. Ratner thought he could get away with a sweetheart price
for the rail yards, so he low-balled his bid and then tacked
on construction costs as part of his purchase price. Mr. Ratner's
'add-ons' add nothing to his purchase price, as both developers
are offering to fulfill those commitments. You can see all of
this on our website breakdown of the bids at: www.dddb.net/bids."
Besides the $100 million difference between the two purchase
prices, the proposed projects are vastly different. Extell proposes
11 buildings over the 8.4-acre Vanderbilt rail yards, ranging
in height from 4 stories to 28 stories. They will not use eminent
domain and they intend to go through the City's community and
political development oversight process known as ULURP (Uniform
Land Use Review Procedures). Extell also plans to build a school,
as well as over 4 acres of public open space.
Ratner proposes to build over the Vanderbilt rail yards as well
as an additional 13 acres currently consisting of private homes,
businesses, and city streets. The private property would be
taken through a State invocation of eminent domain. The Ratner
proposal would overwhelm the community with 20 skyscrapers ranging
from 40 stories to 60 stories, as well as a 20,000-seat sports
arena. Ratner's proposal would completely bypass City oversight,
with a State takeover of the project.
Both developers offer 30% affordable housing. FCRC, as stated
at a City Council hearing, plans to build a total of 7,300 units,
with 2,250 designated as affordable. That is a 30% plan, not
the much touted but false 50% plan.
Here is how the bids stack up.
THE BIDS STACK UP:
For every dollar that Ratner has offered the
struggling MTA, Extell has offered three.
Purchases Prices for Vanderbilt Yards (aka
claims the following line items as part of
their purchase price, when in fact, they are
costs that any developer would have to bear
to build on the site. Extell budgets
these items as part of their construction
Payment to MTA for Net Operating Increases
over 50 years (PV)
of New Vanderbilt Yard
Remediation & Clean-up
of Mass Transit Improvements
Estimated Revenues to the MTA from Sales Tax
are purely speculative and is not part of
the "purchase" of the yards.
Revenues to MTA from Atlantic Yards Sales
Total Purchase Price Offered:
companies have offered to cover platform costs,
(likely with subsidies, as explained below).
For infrastructure costs Extell anticipates
direct subsidies of $150 million, while FCRC
anticipates direct subsidies of $200 million.
However, in addition to the $200
million, FCRC also
expects an unspecified amount
contributed by the City and State towards
their "extraordinary infrastructure
costs", as described in 8ii)
of the MoU
between the ESDC, City and FCRC. The total
"extraordinary infrastructure costs"
are shown to be $163,000,000
on page 2.3 of the FCRC bid. These costs include
the platform amongst other items.
For more information on FCRC's direct and
indirect subsidies, which total at
least $1.6 billion, see www.dddb.net/subsidies/subsidy.pdf