Forest City Signs MOU for Brooklyn project with Zhang Yuliang Chairman of China’s Greenland Group.
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Bruce Ratner / Getty
Brooklyn based Forest City Ratner Companies (“FCRC”), which is the New York-based subsidiary of NYSE listed Forest City Enterprises, (“Forest City”) a company based in Cleveland, and Shanghai based real estate development Greenland Group announced today that their affiliates have signed a non-binding memorandum of understanding (“MOU”) for a proposed joint venture to develop the “Atlantic Yards”, a 22-acre real estate project in Brooklyn that envisages fifteen high-rise residential and commercial buildings ultimately being constructed there.
This new MOU finally gets this major project moving again after progress was sidelined during the recent recession from which the US is now tentatively emerging. Estimates of its total cost have also slipped with the delays, which at the last count were up somewhere around US$4.9 billion.
The proposed joint venture would cover both phase one and phase two of the project, but will exclude the already completed Barclays Center, which is the home of the Brooklyn Nets basketball team (formerly the New Jersey Nets) and is now owned primarily by Russia’s second richest man Mikhail Prokhorov. It will also exclude the first residential apartment tower, which is now already under construction.
Atlantic Yards Project / Shop Architects
The proposed J/V will therefore cover provision of all necessary infrastructure, including utility supply, building of a platform over the Long Island Rail Yards which comprise part of the site, and construction of the mostly residential and some commercial units in the 15 remaining towers. According to the announcement the agreement is still subject to further negotiation, and obtaining all necessary regulatory approvals.
Under the terms of the proposed joint venture, if it should become effective, Greenland Group will acquire 70 percent of the project, co-develop it with FCRC and also share in the entire project costs going forward pro rata on the same 70:30 basis. FCRC will manage the day-to-day activities on behalf of the joint venture, which will be charged with developing the project consistent with the existing approved master plan.
Bruce Ratner, who is Executive Chairman of FCRC is also an Executive Vice President, a member of the founding family and a Director of the parent company Forest City said:
“We are delighted to have an opportunity to create a strong development and investment partnership with Greenland Group. We look forward to working together to bring the housing and other amenities of Atlantic Yards to fruition. Most importantly, this partnership would allow us to deliver its planned 6, 400 units of housing, including 2, 250 units of affordable housing, to market more expeditiously, which is important for Brooklyn and the entire city.”
Zhang Yuliang, Chairman and President of Greenland Group, said for his part:
Zhang Yuliang Chairman and President of Greenland Group
“Greenland is proud of its reputation at home in China and globally and we look forward to working in Brooklyn with Forest City. Brooklyn has become an international brand because it symbolizes how the old and the new can exist together, creating a dynamic environment for people to live and work. Forest City has played a key role in revitalizing Brooklyn and other communities across the country, and we are very excited by the potential to partner with them and be part of this development.”
Mr. Zhang added, “Atlantic Yards is about more than Brooklyn and New York, as important as this development is for the City. It is about how we build sustainable, well-designed housing to meet the needs of diverse groups of people. If we can do that in New York, we can do that elsewhere. That is at the very foundation of what Greenland Group is about.”
Atlantic Yards would be Greenland Group’s second project in the United States. In July, the group purchased a six acre site in downtown Los Angeles and plans to build a hotel and residential units there. The Shanghai based developer is the largest mixed-use real estate developer in China, with projects in more than 70 cities in 25 provinces in China. Greenland Group is respected in particular for developing well-designed, high-rise buildings that are part of large urban complexes built around transit and high-speed rail links. Four of their properties are among the ten tallest existing buildings in the world.
New York City Mayor Michael R. Bloomberg, who has been a longstanding and determined proponent of the development of the Atlantic Yards project, as it will add much needed housing supply to the resurgent economy of New York, with its continued influx of people, said:
“This investment would allow us to move forward with one of the most ambitious affordable housing programs in our City’s history. I am thrilled that this global company sees in New York an opportunity to invest and contribute to the future of our City, an investment that would create housing for thousands of people of diverse backgrounds and means.”
I Fei Chang, President and CEO of Greenland US, said:
“It is always the Greenland Group’s vision to ‘create a better life’ by building quality projects, undertaking social responsibility, and fostering economic growth in local communities. It would be a privilege for Greenland US to join this regional development project, which will have such a positive impact on the economy and the ‘brand’ of Brooklyn. Greenland US continues to look for strategic partners and investments in key US markets.”
Atlantic Yards Project/ Source Shope Architects
About Bruce Ratner
Bruce Ratner is an Executive Vice President and a Director of Forest City, and Executive Chairman of FCRC, the New York based subsidiary of Forest City which is undertaking the project.
He is a respected business and civic leader in New York, with a distinguished career in the public and private sectors. Prior to joining Forest City, Ratner held prominent positions in New York City’s political arena as well as the prestigious New York University Law School.
From 1978 to 1982, Ratner served as commissioner of consumer affairs during New York City Mayor Ed Koch’s Administration. Before that, he spent four years working as a professor at the New York University Law School. From 1970 to 1973, he was director of the Model Cities Program and head of the Consumer Protection Division in New York City Mayor John Lindsay’s Administration.
Bruce Ratner is a board member of the Museum of Jewish Heritage – A Living Memorial to the Holocaust, the Memorial Sloan-Kettering Cancer Center and the Weill Cornell Medical College.
He is a 1967 cum laude graduate of Harvard University and a 1970 graduate of Columbia University Law School.
About Greenland Group
Established in 1992, the Shanghai based Greenland Group has formed a diversified industrial structure with a focus on energy, finance, and real estate. Greenland Group is currently involved in construction projects in more than 70 cities and provinces in China as well as in countries such as Korea, Australia and the United States.
In 2012, Greenland Group ranked 359th among Fortune Magazine’s list of the Top 500 global enterprises, 73rd among Top 500 Chinese companies, and number one among Chinese real estate enterprises. It achieved revenues of US$36.6 billion and a total profit of approximately US$2 billion in 2012.
About Forest City
Forest City Enterprises, Inc. is an NYSE-listed national real estate company with US$10.7 billion in total assets. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States.
It was founded in 1920 after the Ratowczer (later Anglicized to Ratner) family emigrated to the United States from Poland. Eventually the company left the retail and lumber businesses to focus on the ownership, management and development of real estate.
Forest City’s real estate operations continued to grow as the Company went public in 1960, eventually listing on the big board of the New York Stock Exchange. The 1960’s 70’s and 80’s saw the company’s development footprint expand nationally – from the Midwest to California and New York as it became known for complex urban developments.
In the past twenty years, Forest City undertook and completed some of its most well known projects, including The New York Times Building in Manhattan, University Park at MIT near Boston, and Victoria Gardens in California.
In 2011, David LaRue succeeded Charles Ratner as CEO, becoming the first Chief Executive in Forest City’s history who is not related to the founding family. Charles Ratner then became the Chairman of the Board of Forest City in 2011, after having previously served for sixteen years as its CEO. Albert Ratner remains as Chairman Emeritus of the company.