Thursday, October 9, 2014

Forest City Takes Big Step to Restart Atlantic Yards Project

Forest City Enterprises has acquired the interest of its equity partner, the Arizona State Retirement System, in B2 BKLYN, a 363-unit high-rise modular apartment being developed at Pacific Park (formerly Atlantic Yards) in Brooklyn. Work recently ceased on the project after the contractor, Skanska USA, shut down construction at the site and closed the factory being used to build the modular units. The development is now subject to litigation between Forest City and Skanska.

The buyout of ASRS’s equity interest to date, for which Forest City paid $40.5 million, removes B2 BKLYN from the $400 million residential development fund between ASRS and Forest City. The company also assumed ASRS’s share of the debt on B2.

“We felt it was prudent to make this incremental investment now, rather than cloud the future of the fund as a result of litigation related to a single property,” says David LaRue, Forest City president and CEO. “In addition, because this investment makes Forest City the 100 percent equity owner of B2, we will have greater flexibility as we drive to restart work at the building site and the modular factory, and to get the hundreds of affected men and women back to work.”

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