Forest City Ratner in Brooklyn: A real estate pioneer on the way out?
Well before Brooklyn became a brand or was reshaped by Bloomberg-era rezonings, Bruce Ratner had a vision for what it could be. A government official turned shrewd dealmaker, he pursued big real-estate projects, developments like the MetroTech Center office complex, then malls like Atlantic Center and Atlantic Terminal. Coming after much piecemeal revival in brownstone neighborhoods, the projects helped position Brooklyn–and Ratner’s firm, Forest City–for a more ambitious, prosperous future. “A proven visionary,” Downtown Brooklyn Partnership co-chair Bob Catell proclaimed at a 2009 public meeting, saying Ratner “was willing to take risks on Downtown Brooklyn when few others were.”
Barclays Center, which opened in 2012 and brought major-league sports and large-scale entertainment back to Brooklyn, may be Ratner’s best-known edifice, and a new borough icon. But the huge project around it, dubbed Atlantic Yards when announced in 2003 and renamed Pacific Park in 2014, proved to be an albatross to both Ratner’s MetroTech-based firm and its Cleveland-based, publicly traded parent company. Now, as the larger Forest City Realty Trust faces major internal change–a contemplated corporate sale fell through but led to a revamped board–Ratner is facing a turning point. His cycle of ambition, vision, and civic prominence in New York is winding down, even as other developers take up the Brooklyn baton.
Those developers may be private firms less exposed to short-term market forces, like Dumbo-based Two Trees Management, run by the Walentas family, or companies like Rabsky Group and All Year Management, anchored in Brooklyn’s Hasidic communities. Downtown Brooklyn, dicey before Ratner’s entrance, now sizzles enough for Manhattan-based luxury developer Extell to build Brooklyn Point, a 720-foot tower at City Point, with a rooftop pool.
Ratner, scrounging for capital during the troubled, extended Atlantic Yards gestation, recruited some of Brooklyn’s most exotic investors. In 2009, facing a cash crunch to build the arena, he found Mikhail Prokhorov, a Russian billionaire eager to make his mark in New York. Prokhorov bought 80% of the Nets basketball team and 45% of the arena holding company at a bargain price. In 2013, Ratner, seeking to hedge the larger Atlantic Yards bet, found Greenland USA, an arm of a giant Shanghai-based (and state-owned) conglomerate seeking to expand overseas.
Some risks panned out: MetroTech, the parent company’s marquee asset, delivers some $85 million in net operating income. Others didn’t: Greenland USA will soon own nearly all of Pacific Park, Ratner’s most ambitious project. “They’re swinging for the fences with these big, mixed-use projects,” Paul Adornato, a veteran real-estate analyst who lives in Brooklyn, observed of Forest City. “They take many years and are very complex. They’re either going to be a home run or a whiff.”
Praise for Ratner’s vision and drive has been tempered by his reputation for wrangling government help and reworking deals and deadlines. His ambition to bring Manhattan-sized projects to Brooklyn has been commended by analysts who say he has recognized good places for denser development but also drawn scorn from residents who say he has gone too far to encroach on neighborhoods.
His company’s prominent civic and charitable presence—Ratner chaired the Brooklyn Academy of Music (BAM) board, while Forest City has donated to nonprofits set up by elected officials—has been part of his formula for building political capital. “King of the Retail Deals,” real-estate writer Peter Slatin dubbed Ratner in December 1997, calling him “the city’s most prolific developer over the past decade.” Had Ratner worked the system for exclusive deals on public property, or had he taken more risks than the other guys? The answer, Slatin suggested, “may indeed be both.”
Two decades later, that assessment might endure, although with a twist. In the case of his epic project, Atlantic Yards, the formula flopped. With his career now apparently heading toward a valedictory stage, the legacy of Bruce Ratner, 73, merits a retrospective. (Queries to Ratner and his parent firm regarding an interview did not get a response.)
From Public Servant to Developer
The son of an immigrant from the city of Bialystok (now in Poland) who built a construction supply firm in Cleveland, Ratner graduated from Harvard University, then from Columbia Law School in 1970. He joined the New York City’s Department of Consumer Affairs, becoming the city’s Consumer Advocate at 25. The wunderkind led a 40-person staff helping stem fraud in poor neighborhoods.
After teaching law and managing a City Council candidate’s successful campaign, the 33-year-old in 1978 became Mayor Ed Koch’s Consumer Affairs Commissioner, “the next Ralph Nader,” a mentor said. But this next Nader had kids in private school and bills to pay. After four more years of public service, Ratner moved into real estate. He calculated that he had eight years to amass a nest egg that would let him pursue his passions. Instead, real estate—the family business—absorbed him.
Ratner first syndicated small deals, rounding up investors. Then, to build MetroTech and more, he established Forest City Ratner Companies, the New York arm of Forest City Enterprises (FCE), controlled by Ratner’s Cleveland-based extended family(original name: Ratowzer). Founded in 1920 as garage builders and lumber retailers, Forest City expanded beyond its regional niche, building offices, shopping malls and military housing. In larger markets, it came to specialize in tricky public-private partnerships.
While New York real-estate dynasties focused on Manhattan or sometimes outer-borough apartments, Ratner believed Brooklyn could support office space, malls, and big-box stores. ”I had traveled all the boroughs as Commissioner,” he told the New York Times, ”and I knew downtown Brooklyn had excellent transportation.” From that insight—and the recognition that working- and middle-class New Yorkers comprised an underserved retail market—he forged an empire. Around the city, his firm built office space, entertainment venues, hotels, and ultimately higher-end projects, often recruiting former public officials as executives.
Finding a Place for Towers in Brooklyn
Though Brooklyn was New York City’s largest borough by population, its skyline stayed somnolent for nearly 60 years after the Williamsburgh Savings Bank tower rose off Flatbush Avenue near BAM. Polytechnic University (now the NYU Tandon School of Engineering), an independent engineering school struggling in Brooklyn’s ragged downtown, piggybacked on a 1983 report from the nonprofit Regional Plan Association, promoting Downtown Brooklyn as the city’s third business district, after Manhattan’s midtown and Wall Street. Though Polytechnic envisioned a Silicon Valley East, Ratner’s team, responding to a request for proposals that established firms ignored—favored space to relocate Wall Street back-office jobs.
As Ratner scouted tenants for MetroTech, he met with Steve Spinola, Koch’s point man for economic development and later head of the powerful Real Estate Board of New York. The Wall Street giant Morgan Stanley had rebuffed Ratner’s pitch to relocate offices to the future MetroTech, but Spinola controlled a nearby city garage just blocks away, at the edge of the more palatable Brooklyn Heights. He offered Ratner a deal to develop the property if he could quickly produce a building design. Ratner came up with plans for a 250-foot brick slab that Brooklyn Heights neighbors protested, but the deal went through and Morgan Stanley signed up. In 1988, Forest City opened One Pierrepont Plaza, which more recently has housed a wider variety of tenants (even Hillary Clinton’s Presidential campaign headquarters).
The 16-acre MetroTech, which benefited from eminent domain and $300 million in tax breaks from elected officials desperate to retain jobs in the city, would subsume the western end of Myrtle Avenue, with park-like green space replacing the street. Ratner’s construction chief Bob Sanna brought an innovation to the city: precast-concrete panels faced in brick, which saved time and cost. Initially conceived as eight towers, MetroTech encompasses 12 buildings with some 5.5 million square feet of mostly office space housing 22,000 jobs. Its June 1989 construction start, said journalist Dennis Holt, signaled the “new Brooklyn.” Though the public assistance would generate criticism—“He’s the master of subsidy,” historian Fred Siegel observed in 2005–and one-third of MetroTech’s space would be occupied by government agencies, city officials said the project would catalyze further private investment.
Ratner indeed worked the system. By 1997, his firm led the city in spending on lobbyists. Despite being a proud liberal Democrat, Ratner raised $100,000 for Republican Rudy Giuliani. Insider status couldn’t have hurt. Forest City got preferred access to a development in Times Square, a project that required the engineering chops for tricky operations, like moving a historic theater down the block.
It wasn’t always smooth sailing. In 1990, Ratner paid $34 million for Downtown Brooklyn’s dingy Albee Square Mall a few blocks from MetroTech. It was rebranded as the Gallery at MetroTech, but Ratner couldn’t get the right tenant mix to attract shoppers. Four years later Ratner admitted his mistake; by 2001, he’d lost the mall to his lenders.
If MetroTech represented the “new Brooklyn,” it failed to foster street life, its bland towers turned inward, accommodating tenants wary of crime. Similarly, Forest City’s Atlantic Center mall, opened in 1996 on urban-renewal land along Atlantic Avenue, lacks doors and windows on half its perimeter—the “ugliest building in Brooklyn,” critic Francis Morrone once said. It also lacked indoor gathering space, to deter “tough kids,” as Ratner reflected in a remark he said wasn’t racially coded. “Poor Bruce,” Sanna once told The Real Deal, “was being forced to conform to lease requirements of these suburban stores.” But Ratner also blamed himself for conceding to utilitarian designs, telling New York magazine, “I’ve been talking for ten years about trying to use ‘design architects’ instead of ‘developer architects.’”
Going to the Next Level, Architecturally
Ratner began to meet the moment. The brick-clad Atlantic Terminal mall, adjacent to Atlantic Center and incorporating the Long Island Rail Road terminal, opened in 2004 with a more permeable, pedestrian-friendly perimeter. But Ratner’s embrace of design architects began in Manhattan in 2000, when Forest City, in partnership with the New York Times Co., chose Renzo Piano to design the new Times Tower in Midtown. Its path to a 2007 opening was hardly pre-ordained. “‘MaryAnne, we’re never going to win,’” Ratner would tell former deputy MaryAnne Gilmartin, she recounted in a recent podcast interview. But Ratner let her pursue it, toggling between predicting the project would “take this company down” and that it would bring Forest City “to the next level.” The latter proved prescient.
During the Times Tower competition, Ratner had met Frank Gehry, perhaps the world’s most famous architect, ultimately hiring him to design the 8 Spruce St. luxury rental tower in Lower Manhattan. It opened in 2011, dubbed “New York by Gehry,” eased by tax-exempt Liberty Bonds for post-9/11 construction. Times critic Nicolai Ourousoff called Gehry’s high-rise, with its torqued façade, the city’s finest new skyscraper in decades. It launched a trend of starchitects designing high-end residential buildings.
By 2014, those two architectural triumphs helped Ratner, by then the New York firm’s executive chairman, and recently-elevated CEO Gilmartin win the Municipal Art Society’s Jacqueline Kennedy Onassis Medal for contributions to the city’s built environment. Still, neither project was free of hardball tactics: the Times Tower relied on the dubious use of eminent domain; construction on 8 Spruce was halted midstream to wring concessions from labor.
The Barclays Center, which opened in September 2012 with a string of Jay-Z concerts and the first Brooklyn season of the Nets, was the third pillar of that Onassis award. It was not a Gehry design, though he’d been touted as the guiding genius behind Atlantic Yards, announced in December 2003: an arena plus 16 towers. The project gained official approvals in late 2006, but faced lawsuits as well as the recession. The parent company’s stock price plummeted from nearly $70 in June 2007 to below $4 in November 2008. Gehry’s arena, Ratner concluded, would be too large to finance; the developer’s mantra was, “‘Don’t worry, we will figure it out,’” a deputy later said.
Ratner has called himself a “civic developer,” versus rivals who “look at more, I think, the economics,” and he did lead the launch of a post-Superstorm Sandy charitable fund. But in the face of economic headwinds, he made a bottom-line decision to downscale the Barclays plan. He essentially adopted the prototype of the smaller Indianapolis arena, designed by Ellerbe Becket with a tight focus on basketball, instead of Gehry’s, larger, more versatile structure. However, once architecture critic Ouroussoff derided the “colossal, spiritless box,” Ratner made a savvy move. He recruited the innovative firm SHoP Architects and was willing to spend $54 million more. SHoP transformed the structure, wrapping it with a pre-rusted metal skin and appending an oculus—a broad opening—out front. Gehry’s “Miss Brooklyn” tower, once intended for the tip of the property at Atlantic and Flatbush avenues, would be abandoned; the arena’s accidental plaza now seems permanent.
The Onassis award also sparked criticism from longtime community planner Ron Shiffman, a board member of Atlantic Yards opponent Develop Don’t Destroy Brooklyn, who warned against honoring design while ignoring “the misuse of power.” As this writer has pointed out, Forest City’s much-touted promises of jobs and contracts for minorities, via a novel Community Benefits Agreement that helped win grassroots support for the project, have hardly been fulfilled. The required independent compliance monitor was never hired and some former backers have turned bitter. Though Ratner in 2003 claimed, “I have never, ever seen a project get less protest than this,” he clearly didn’t foresee the pushback, notably online, prompted by his plan, which might have seemed less shocking years later, once the Downtown Brooklyn rezoning transformed the nearby skyline.
Meanwhile, the company escaped sanction but not criticism. In 2012, Times columnist Michael Powell described Forest City as “between legal clouds,” mentioned in two criminal cases as seeking or gaining favors, yet untouched by prosecutors. (Ratner’s friend Betsy Gotbaum, the former Public Advocate, responded in a letter to the editor that Ratner “has always demonstrated the highest ethical standards and behavior.”)
That said, Ratner was regularly honored by mayors and governors, and he often returned the regards. “I’ve known Bill de Blasio for a very long time,” Ratner said in an October 2013 Reuters interview. “He’s going to make a very good mayor, and he’s going to be good for business.”
Some Gambits Play Out, Others Don’t
Ratner figured some other things out. Among real-estate developers nationally, Forest City was among the first to reap low-interest loans from immigrant investors seeking green cards—thanks to a nudge from the city–in a controversial federal program called EB-5. In November 2011, he surprisingly hedged his pledge to build half of Atlantic Yards’ 4,500 rental apartments as affordable units, telling the Wall Street Journal that it didn’t “work for a high-rise building that’s union built”–a plan that he had proposed and the state approved. (Forest City’s build-union policy brought vocal public support and certain skill sets, but also raised costs.)
The seeming solution was what the Municipal Art Society called Forest City’s “pioneering method of modular construction.” At a new Brooklyn Navy Yard factory, cross-trained workers would build apartment sections to be trucked to the Prospect Heights site. With concurrent work on site, and lower-paid jobs indoors, the developer could save money and time, fueling first the world’s tallest modular tower, then the full buildout, including 1,930 condos. And if Forest City “cracked the code” for modular, as Ratner professed, it could sell turnkey towers to others.
But there was a steep learning curve with such a pioneering approach. The 32-story 461 Dean, flanking the Barclays Center and 50% affordable, was plagued by delays and even leaks. Forest City, which had established a new manufacturing business with partner Skanska USA, had to buy out Skanska’s interest; the two still clash in court over cost overruns. The modular gambit, aimed to help Atlantic Yards and launch a new business line, instead pushed the project—and Ratner’s firm–further toward fiscal jeopardy.
The Skanska case also exposed Forest City’s sharp elbows. Ratner, who a New Yorkmagazine contributor once called “the most pleasant and affable person we talked to” for a feature on Barclays and the Nets, was accused by a Skanska executive of using “a vulgar street epithet” and saying, “I don’t care if it costs you fifty million to finish the project … I’ll see you at the grand opening.”
Meanwhile, the parent corporation faced a cash crunch. In 2011, Forest City sold 49% of 15 retail and entertainment properties around New York City, including the Atlantic Terminal and Atlantic Center malls. It then sold similar stakes in both 8 Spruce and DKLB BKLYN, the firm’s first residential building in Brooklyn. Ratner didn’t win a bid to develop a large Lower East Side site, Seward Park, in partnership with the Metropolitan Council on Jewish Poverty. It couldn’t help that, while the bid was pending, Met Council head Willy Rapfogel—a friend of Assembly Speaker Sheldon Silver, a longtime Ratner ally–was fired during a criminal investigation (and later pleaded guilty to grand larceny).
Atlantic Yards faced even more questions. While Gilmartin, in February 2010, had said, “We don’t build to flip,” two-and-a-half years later Ratner called it his “most difficult, bruising development project.” In October 2013, parent Forest City Enterprises announced it would sell 70% of Atlantic Yards, except the Barclays Center operating company and the modular tower, to an arm of Shanghai-based GreenlandHolding Co. Rather than earning a proportionate share ($381.5 million) of the $545 million it had sought, it got only $200 million. Forest City ultimately took a $242.4 million impairment—a loss in the property’s valuation.
Forest City Enterprises CEO David LaRue acknowledged two “hard lessons … We need to control land rather than own it, prior to being ready to go vertical, and we need a strong capital partner up front for a project of this magnitude.” In other words, they’d committed too much equity and expensive short-term financing, even as legal, infrastructure, and other costs grew. So much for a March 2007 pre-recession comment by LaRue’s predecessor, Chuck Ratner (a Bruce cousin), who suggested that delays, given Brooklyn’s boom, wouldn’t harm projected returns: “All we know is that if we pick the right place and we’re in with the right people, that over time we’re going to create tremendous value.”
Greenland USA, changing the project’s name to Pacific Park, decided that three new towers would soon launch, none of them modular. Forest City sold the pre-fab factory to former manager Roger Krulak, the sum undisclosed. Perhaps 461 Dean was too ambitious. New York City Deputy Mayor Alicia Glen, announcing a city push for prefab housing, recently told The Real Deal, “One thing we’ve learned is don’t try to do high-rise.”
The new joint venture, Greenland Forest City Partners, has built 550 Vanderbilt, the first condo building in the development, with significant sales to Chinese buyers, and two “100% affordable” rental towers, 535 Carlton and 38 Sixth. Still, half of those 600 apartments are middle-income units tough to lease, given rents like $3,223 for a two-bedroom apartment–hardly a sign, as some backers had believed, that Atlantic Yards would help stem gentrification.
Through Gilmartin in August 2014 called Greenland “a dream partner,” that didn’t last. With at least 11 more buildings and substantial infrastructure to go, Forest City Realty Trust (the parent’s new name) in late 2016 announced, seemingly unilaterally, that it would pause new construction, citing a glut of market-rate apartments, uncertainty about the state’s 421-a tax break, and rising construction costs.
Ratner’s project was suffering from bad timing and a changing marketplace. Though Atlantic Yards apartments were once expected to hit the market with relatively little competition, the Downtown Brooklyn rezoning, announced after Atlantic Yards, brought a plethora of residential units, rather than the envisioned office space. Also, Forest City apparently underestimated infrastructure costs from the start. The resignation of the scandal-tinged Silver removed a protector in Albany; moreover, Forest City had faded as a legislative presence after key lobbyists left in 2012, observed former Assemblyman Jim Brennan.
The pause came with another Forest City impairment of nearly $300 million and a disclosure that the “remaining basis in the investment … is not material.” That meant Forest City earned nothing on its substantial non-arena investment–impairments now total $732 million–and has “reduced its exposure such that any large success or failure from here would have a small impact” on the bottom line, said Adornato, the real-estate analyst, who most recently followed Forest City for BMO Capital Markets. It also sparked what The Real Deal nine months later called “persistent rumors of discontent within the joint venture.” Greenland’s pockets were no longer as deep; an effort to find investors for three Pacific Park development sites fizzled. This past January, it was disclosed that a Greenland-Forest City restructuring had been percolating for a year; during that period, Gilmartin had downplayed any disagreements, even as, it later became apparent, she was contemplating an exit.
For Forest City, Financial Uncertainties
Today, Ratner’s projects dominate the top ten assets of the parent firm: MetroTech (No. 1), the Times Tower (No. 3), the East River Plaza mall in East Harlem (No. 7), the Atlantic Terminal Office tower (No. 8), and 8 Spruce (No. 9), according to a February 2018 corporate presentation. Despite such cash cows, Forest City–both locally and nationally–faces an uncertain future. When becoming a real-estate investment trust (REIT) like many corporate peers in 2016, in part to appeal to REIT index investors, Forest City Realty Trust lowered risk by pulling back on new development and exiting non-“core” businesses. So it sold to Prokhorov its controlling share in the arena operating company and its remaining stake in the Nets.
The Barclays Center, despite a robust schedule and plaudits for its architecture, had been more prominent than profitable. Owning the New Jersey Nets, which Ratner acquired in 2004, had been a poor fit with his main business; the Wall Street Journalheadlined one retrospective “Bruce Ratner’s NBA Waterloo.” Then again, had the owner, not answering to quarterly metrics, seen the team through to Brooklyn and absorbed more losses, it might have been positioned, as is Prokhorov today, to sell at a profit to a billionaire eager for a rare commodity.
Forest City Realty Trust has faced fierce criticism for losses, especially regarding Pacific Park. Hedge-fund managers, noting that Forest City’s share price lags below asset value, have urged change. In late 2016, apparently to regain investors’ grace just after disclosing the second large Pacific Park impairment, Forest City agreed to collapse a two-class shareholder policy that had kept the founding family in control. In making the announcement, the company disclosed Bruce Ratner’s departure from the board neutrally, sans kudos, though it praised his cousin Chuck.
It’s no small irony that, despite brickbats from Brooklyn opponents (novelist Jonathan Lethem, in a 2006 Slate open letter, rued Ratner’s “manipulative dishonesty”), activist investors have been even harsher. Land and Buildings Investment Management’s Jonathan Litt in January 2017 slammed Ratner’s purported “glaring conflicts of interest and outrageous payments” and blamed the New York arm for the “vast majority” of losses. One investment analyst even asked CEO LaRue if a 2006 deal to restructure the Brooklyn subsidiary’s relationship with Cleveland could be revisited with some “clawback” from Ratner. (Answer: no.)
In March 2017, Forest City Ratner Companies quietly became Forest City New York; while the geographic identifier conformed to company style, it cut a family connection. “The leadership team will remain empowered and engaged,” Ratner and Gilmartin wrote to their Forest City team in a company memo this writer acquired. Last September, though, Forest City Realty Trust announced it would consider “a broad range of alternatives to enhance stockholder value,” including “potential merger, acquisition or sale transactions.”
Rumbles about change persisted for months. In November, Reuters reported on merger talks with Chicago-based Equity Commonwealth. In January, Bloomberg suggested that giant Toronto-based Brookfield Asset Management might absorb Forest City, then worth about $6.4 billion. On March 22, Forest City announced that it had rejected a buyout offer and had decided to pursue internal changes, including the replacement of nine of 13 directors, which further diminish the Ratner family role. Analyst Adornato said that he still thinks a sale is likely down the line, and that the fate of Forest City New York–focusing on lower-risk projects instead of large-scale development–had already been set.
A Chosen Successor Seeks Greener Pastures
Forest City New York has already felt the pinch, enduring multiple layoffs and executive departures, leaving empty desks at One MetroTech and diminished expertise. Gilmartin, one of the most powerful women in New York City real estate, in January departed to co-found L&L MAG, a privately-owned firm, luring four top lieutenants. A third round of layoffs ensued, leaving the New York office, which in 2005 boasted 250 staffers, including its management subsidiary, perhaps below 100. (The parent company wouldn’t confirm numbers.) Gilmartin’s rise had highlightedForest City as meritocracy: women could thrive in a male-dominated field. Yet Forest City also was accused, in a 2007 draft discrimination complaint, of being slow to act on allegations that an executive sexually harassed several female employees.
If Gilmartin was not leaving a sinking ship, well, it was hardly full-steam-ahead. Forest City recently developed the new Tata Innovation Center at Cornell Tech on Roosevelt Island, but the corporate posture now seems cautious. The parent company still shoulders far more debt than fellow REITs, a red flag for investors. Gilmartin, a self-described “hopeless developer,” departed just as Forest City further pulled back from Pacific Park, agreeing to sell all but 5% to Greenland, lowering risk but effacing past ambitions. (Public REIT investors, observed Adornato, “have a shorter time horizon and lower risk/reward objective than a private development company,” and Atlantic Yards/Pacific Park “may be a massive winner in ten or 50 years.”) Forest City is shopping 461 Dean, the modular tower, expecting another loss, which will offset gains from selling retail properties. A three-tower project at East River Plaza, part of a partnership, also seems stalled. LaRue, talking recently with investment analysts, sounded lukewarm about new projects in New York.
Gilmartin’s departure came with no public comment from Ratner nor “stay-the-course” pledge from Forest City New York, which has long strategized public relations, turning project announcements into pageants. Sanna has been appointed interim CEO. It seems a far cry from Ratner’s pronouncement, in a company email upon Gilmartin’s promotion in 2013, that “we will work closely together to set our company’s direction for many years to come.”
Today, Ratner may focus more on his civic roles. He has chaired the Museum of Jewish Heritage since 2014 and serves on the boards of the Memorial Sloan-Kettering Cancer Center and the Weill Cornell Medical College, and just last week was named to the board of the Cold Spring Harbor Laboratory. Some recent interviews have had a valedictory air. When named to the Crain’s New York Business Hall of Fame in 2016 and asked what he might have done differently, Ratner told the publication, “Every time I yelled at someone I would take it back.” Among winners of the Brooklyn Chamber of Commerce’s recent Century Awards, Ratner in a brief pre-recorded videoreflected on how MetroTech kept workers in New York, how he’d been fortunate to do business in Downtown Brooklyn, “and I hope to be able to help in whatever way I can over the next—whatever years I’m here.”
Ratner also told Crain’s that, had he known the true economics of Atlantic Yards, he might have passed. That raises the question why few observers publicly questioned its viability at first. (After all, opponents decried Ratner’s expected profit and supporters encouraged public subsidies, tax breaks, and an override of zoning to further the project.) In 2007, Assemblyman Brennan raised doubts and, in 2009, a consultant to neighborhood groups expressed huge skepticism; Forest City publicly shrugged it off. It turns out that, Dan Doctoroff, Mayor Mike Bloomberg’s deputy mayor for economic development, considered Atlantic Yards “a crazy risk” when presented in 2002, though he publicly served as a cheerleader, he wrote in his 2017 memoir. Meanwhile, observed Brennan, the state agency overseeing Atlantic Yards, now called Empire State Development, “was owned by the developer.”
Doctoroff also wrote that, while we may never know if Ratner will profit, the arena boosted restaurants, nightlife, and property values. Indeed, Barclays Center has helped develop Brooklyn as a brand and, as Forest City might say, create a place. While its construction and operation have vexed its nearest neighbors, the arena has had less impact than feared, partly because four towers were not built simultaneously, as planned. Overall, the arena’s direct economic impact remains murky.
One Atlantic Yards legacy is a reminder that, as onetime project executive Jim Stuckey pronounced in November 2005, “Projects change, markets change.” When four office towers were supposed to flank the arena, anchor tenants were elusive; now there will be three residential towers. In May 2008, after project delays stirred significant doubt, Ratner, in a Daily News op-ed, proclaimed a new timetable: “We anticipate finishing all of Atlantic Yards by 2018.” Today, it might be prudent to add another ten years.
A Firm Reflected in Brooklyn’s Arc
Over three decades, Forest City’s projects have spanned enormous changes. In 2011, Kathryn Wylde, president and CEO of the Partnership for New York City, praisedRatner for “dragging Brooklyn into the 21st Century.” His company’s Court Street cinema complex, which opened in 2000, is hardly elegant, but old-timers remember that a porn theater preceded it. The current building, the architectural writer Suzanne Spellen allowed in 2013, “has sort of grown on us.” The former Albee Square Mall site that Ratner lost gained huge value after the 2004 Downtown Brooklyn rezoning. By 2007, new owner Joe Sitt flipped the lease; a new development team built the giant City Point project, with residential towers, an upscale mall, and an artisanal food court. These days, said City Point executive Paul Travis, the targeted customers were not the working class but the “500,000 people who live in the brownstone neighborhoods,” plus new Downtown Brooklyn residents, the improbable result of that rezoning.
If the market for Wall Street back office space has declined, some TAMI (technology/advertising/media/information) tenants now bypass Manhattan for Brooklyn sites in the “Tech Triangle,” from Downtown Brooklyn through Dumbo to the Brooklyn Navy Yard, or in Williamsburg and Bushwick. Latter-day developers—many with less allegiance to organized labor than Forest City–bring different risk horizons; by July 2016, Gilmartin said Forest City was looking to Queens and the Bronx, not Brooklyn. That year was Ratner’s last appearance on City & Statemagazine’s list of the city’s 100 most powerful people. (Last year, Gilmartin made the list, with LaRue; neither appeared this year, though Jed Walentas of Two Trees made his debut.)
Back in 1990, Ratner was asked, upon announcing what would be the borough’s second tallest tower, if he’d considered breaking the height record. ”We’re not into that,” he said. By 2003, though, Gehry’s “Miss Brooklyn” was to dwarf the 512-foot Williamsburgh Savings Bank. In a nod to public concern, Forest City, upon the 2006 Atlantic Yards approval, agreed to lower Gehry’s tower one foot below the bank, without reducing the bulk.
Today, such a gesture would seem quaint. New Downtown Brooklyn edifices dwarf the bank, renamed One Hanson Place, its offices turned into condos. Across the street, an Apple Store and Whole Foods 365 recently opened in 300 Ashland, a Two Trees tower. The new owner of the Atlantic Terminal and Atlantic Center malls plans to double the rents, adding upscale tenants.
Meanwhile, Greenland Forest City aims to move the bulk of the unbuilt “Miss Brooklyn” across Flatbush Avenue to a site currently housing a Modell’s and P.C. Richards, envisioning a two-tower complex nearly 800 feet tall. The project, yet to be approved, has been suggested for Amazon’s second headquarters and would contain high-end retail—a distinct contrast from Ratner’s early mall strategy. Up Flatbush Avenue, near Junior’s Restaurant, a supertall tower, some 1,066 feet, is rising. Even closer, just two blocks from the Barclays Center, developer Alloy has proposed 80 Flatbush, a huge two-tower project stretching 986 feet. Seeking permission to build what some call “unprecedented” density near row houses, Alloy promises schools, cultural space, and affordable housing. Such large projects—and complicated bargains–all reflect the Brooklyn that Bruce Ratner helped awaken.
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