BROOKLYN, NY – Forest City Enterprises and Shanghai-based Greenland Group Co. have completed a definitive agreement for a joint venture to develop Atlantic Yards, a 22-acre residential and commercial real estate project in Brooklyn. The two companies hadannounced a memorandum of understanding for the joint venture in October.
The joint venture, which is expected to close in 2014, would cover both phase one and phase two of the project – excluding Barclays Center and the first housing tower, B2 – including infrastructure, a permanent MTA rail yard, a platform above the rail yard and future residential units. The closing of the agreement is subject to necessary regulatory approvals, including the Committee on Foreign Investment in the United States (CFIUS) as well as the government of China.
Under the joint venture agreement, the Greenland Group would acquire 70% of the project and co-develop the project with Forest City, with both organizations sharing in all project costs going forward in proportion to their ownership interests. In addition, the Greenland Group would also make a capital contribution to reimburse Forest City for certain costs incurred to date. Forest City, through its New York-based subsidiary, Forest City Ratner would manage day-to-day activities on behalf of the joint venture, which would develop the project consistent with the approved master plan.
Says David LaRue, Forest City president and CEO, “This agreement is an important step forward for Atlantic Yards. Securing strategic partners to invest with us to activate development and create long-term value is a key strategy for Forest City. Upon closing, Greenland Group promises to be our largest such partnership to date. Under MaryAnne Gilmartin and Chris Clayton's leadership, we have created a formidable and unprecedented strategic partnership.”
Zhang Yuliang, chairman and president of Greenland Group, adds, “Like Forest City, we are committed to building the highest quality housing using the best design and cutting-edge technology. To do this in Brooklyn, New York is a dream for all of us at Greenland. We look forward to creating a project there that will speak to the world about the importance of affordable housing and world-class design. We are very excited with the potential to partner with Forest City on this development.”
Bruce Ratner, executive chairman of FCRC notes, “With this definitive agreement in place, we are a major step closer to delivering more expeditiously the affordable housing and other benefits of Atlantic Yards to Brooklyn. The Greenland Group's interest and willingness to make this investment is an extraordinary vote of confidence in our city and state.”
Yifei Chang, president and CEO of Greenland US, asserts, “Atlantic Yards is the ideal project for Greenland Group to partner on because it represents values that we strongly believe in, affordable housing and sustainability. For Brooklyn to remain true to its history and reputation it must remain a home for all. Working with Forest City, we believe we can help achieve those goals, and do so in a way that is innovative, attractive and will benefit the community.”
(Later in the week, Forest City provided more detail on how the partnership will work.)
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
