Ratner Admits Arena Funding In Peril.

By way of NoLandGrab:

COURT TROUBLE

RATNER ADMITS ARENA-FUNDING WOES

The New York Post
by Rich Calder

Could the global credit crisis and sub-prime mortgage woes be the straws that broke Atlantic Yards' back?

Don't fork over money to reserve seats for the Brooklyn Nets just yet.

Developer Bruce Ratner is running into trouble securing funding for his controversial $4 billion Atlantic Yards project, which would bring an NBA arena for Ratner's Nets and 16 skyscrapers with residential and commercial space to Prospect Heights, according to court documents obtained by The Post.

The papers, filed Friday by Ratner's firm in an attempt to speed up the appeal process in a lawsuit by project opponents, reveal for a first time that the biggest development in Brooklyn's history is in jeopardy because of dragging litigation and a slumping fiscal market.

"The credit markets are in turmoil at this time . . . There is a serious question as to whether, given the current state of the debt market, the underwriters will be able to proceed with the financing for the arena while the appeal is pending," one affidavit says.

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OK, let me get this straight...forest city's latest gambit is to say - lets throw out these lawsuits ASAP because the credit market is drying up and economy tanking. In other words, lets grab it out of the state budget NOW, so when the shortfalls occur, taxpayers, schools, homeowners will have to absorb the costs, not Forest City. Does this sound like a legitimate project, or just a reckless land and cash grab?

Again, Forest City said:

As the Court surely is aware, the credit markets are in turmoil at this time. Many lenders and bond insurers are facing financial difficulties, and are becoming much more cautious. It is not clear what the financial climate will be in several months, when the arena bond financing is made available to the public.

Although the decision that was issued by Justice Madden in this case on January 11, 2008 should be helpful in providing comfort to potential investors that there is no significant risk that the courts will annul the approvals for the Atlantic Yards project, there is a serious question as to whether, given the current state of the debt market, the underwriters will be able to proceed with the financing for the arena while the appeal is pending before this Court.

They are essentially admitting that the project is financially risky. Why are taxpayers funding it?

Further if the market is drying up for credit, its a reflection that both the real estate market is cooling and bankers are more temperate about financing questionable projects - if that is the case, then why would Forest City/Ratner want to build? Because WE Pay for it, and WE absorb the risks.