BROOKLYN, NY - Forest City Enterprises, Inc. and Shanghai-based Greenland Group Co. today announced that they have signed 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 had announced 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 (CFIS) as well as the government of China.
Under the joint venture agreement, the Greenland Group would acquire 70 percent 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 Companies (FCRC), would manage day-to-day activities on behalf of the joint venture, which would develop the project consistent with the approved master plan.
David J. LaRue, Forest City President and CEO, said, "This agreement is an important step forward for Atlantic Yards. We look forward to welcoming Greenland Group as a partner and applaud their commitment to affordable housing, their dedication to the future of Brooklyn and New York, and their confidence in Forest City. 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. I want to acknowledge the fine work of our New York team on this important milestone. Under MaryAnne Gilmartin's and Chris Clayton's leadership, we have created a formidable and unprecedented strategic partnership that will allow us to move forward on one of our most important and ambitious developments.
Zhang Yuliang, Chairman and President of Greenland Group, said, "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. Brooklyn has fast become an international brand; and as an international company we look forward to creating there a project 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 C. Ratner, Executive Chairman of FCRC said, "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 and we look forward to working with them as partners as we bring Atlantic Yards to completion, especially the 6,430 units of housing, including 2,250 units of affordable housing."
Atlantic Yards would be Greenland Group's second project in the United States. In July, Greenland Group purchased a site in downtown Los Angeles and plans to build a hotel and residential units. The Shanghai-based developer is the number one multiple-function 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. Four of their buildings are among the ten tallest buildings in the world.
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 $36.6 billion and a total profit of approximately $2 billion in 2012.
The definitive agreement, which was completed less than four months after Forest City and Greenland Group met at the Atlantic Yards site late this past summer, was signed by representatives of both companies at a meeting in Shanghai.
MaryAnne Gilmartin, President and CEO of FCRC, said, "Chairman Zhang Yuliang and his team are to be applauded for both their willingness to invest in New York and their desire to achieve this agreement in such a short period of time so we can collectively work to bring this important project to fruition. They have shown repeatedly that they are innovative, design focused and understand infrastructure and vertical construction, values that we share at Forest City."
I Fei Chang, President and CEO of Greenland US, said, "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."
Empire State Development President & CEO and Commissioner of the New York State Department of Economic Development Kenneth Adams, said, "Atlantic Yards is an important project that will bring thousands of jobs, affordable housing, open space and community facilities to Brooklyn. We look forward to welcoming Greenland Group to our effort of bringing this project and all of the public benefits it will create to completion."