In her keynote remarks at Avison Young’s Tri-State all-employee meeting last week, Forest City Ratner CEO MaryAnne Gilmartin sounded off on Brooklyn’s most famous sports venue, the Barclays Center.
Forest City recently closed on the sale of its stake in the arena, which is valued at $825M, along with its interest in the Brooklyn Nets, which are worth a total of $875M. MaryAnne told the crowd of 130 that it was chiefly a practical decision—but one that took a personal toll.
“When you build a building it does become like a child,” she said. “You nurture it.”
Forest City filed paperwork with the SEC last year and officially became a public REIT just before the new year. MaryAnne pointed to the volatility of income from an asset like an arena as not suited to the direction of the company. MaryAnne put it like this: a stadium’s not a typical “food group” of a public REIT.
Forest City projected the arena would bring in $76M in its first year of operation. In the first nine months of operation, it had brought in just $19M.
If the 51-year-old CEO, chatting here with Avison Young's Mitti Lieberson, is mourning the loss of the arena, she sounded less sad to part ways with the basketball team, which Forest City acquired before moving it across the river, in her words “to control the decision to move from New Jersey to Brooklyn.”
“I do not recommend buying a basketball team if you’re a real estate company,” she told the crowd.
The NHL’s New York Islanders, historically Long Island’s professional hockey team, have called the Barclays Center home since the start of the current season. MaryAnne said Forest City Ratner redesiged the building as the recession took hold to make it financially viable and help the company recoup its investment of over $1B in the building—an investment she that said was under strain at the time.
Things looked bad enough in March 2009 that starchitect Frank Gehry, who Forest City brought on to design the now-famous building, declared in a New York Magazine piece “I don’t think [it’s] going to happen.”
Well, it did happen. As MaryAnne explained, in order to save the project, a reconfiguring was needed. As a result, she said, the arena was finished with a couple of thousand seats partially obstructed when it’s set up for hockey games, but not when it’s set up for basketball games—something famously loyal Islanders fans haven’t been happy about.
But MaryAnne was clear that the team won’t be returning to its former home, the Nassau Coliseum, which Forest City Ratner is retrofitting for non-NHL uses. As for the possibility that’s been floated of a new arena for the team in Queens, she sounded doubtful.
“Building an arena is not an easy thing,” she said. “It doesn’t happen quickly or easily.”
