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BROOKLYN-The MTA will negotiate exclusively with Forest City Ratner for property at the intersection of Atlantic and Flatbush avenues here. The plan to construct housing over the Long Island Rail Road yards is part of a larger effort that will bring an arena for the Ratner-owned New Jersey Nets to the area.

Extell Development Co. had also bid on the site and for a housing and retail development. In a statement, Gary Barnett, president of Extell said the firm was considering all of its options and was disappointed about the exclusive negotiation period. "They apparently are giving him an opportunity to change his bid. We believe we should be extended the same opportunity." Forest City Ratner's president Bruce Ratner says "we believe we submitted a very strong bid with operational and cash benefits for the MTA and the LIRR."

In March, Forest City signed a memo of understanding with the state and the city for the development of the Atlantic Yards project. The $2.5-billion effort involves the development of a Frank Gehry-designed arena as well as an office, retail and the residential portion. Approximately half of the 4,500 rental units in the proposal will be set aside for low- and moderate-income households.