Crains New York - January 7, 2013 - (Page 4)

IN THE Ice palace or shopping mall? MARKETS Kingsbridge decision nears by Aaron Elstein Either way, officials hope to see big job gains in the Bronx BY DANIEL GEIGER A week into the new year, a decision to convert the Bronx’s Kingsbridge Armory into either a massive iceskating center or an urban mall finally appears to be near. A spokesman for the New York City Economic Development Corp., the city agency that is weighing the two competing bids to redevelop the hulking four-acre property, said it would announce the long-awaited winning plan in the next few days. Having hinted at—and missed— deadlines for a decision last summer and then at year’s end,the city has felt pressure to finally make up its mind. “We were expecting something before the end of the year, and we were disappointed,” said Marlene Cintron, head of the Bronx Overall Economic Development Corp., who is hoping the armory could be a salve for the county’s 11% unemployment rate, the highest in the state. The two proposals are vastly different. The ice center, which would cost about $275 million to build, would rank as the biggest skating facility in the nation. The project’s backers predict it could make the Bronx a nexus for ice sports like fig- its impact on local retailers, and who insisted that the stores pay higher wages. To transcend that defeat and have work begin on the armory during his tenure, Mr. Bloomberg needs a winner to be crowned quickly. The delays have prompted A RENDERING of the armory as ice-skating center. questions about whether more than just indecision is ure skating and hockey. Turning the complicating the bid. Backers of the 103-year-old armory into an urban skating rink—a group of banking mall, on the other hand, would cost executives who have grandly dubbed a relatively modest $100 million and their proposal the Kingsbridge Nawould result in a large portion of the tional Ice Center—have predicted 2 space being devoted to a mix of million annual visitors. But despite small local vendors and larger na- those lofty projections,the group has yet to produce assurances it can setional retail chains. cure needed financing. In that re‘Sense of urgency’ gard, Youngwoo & Associates, the “There is a sense of urgency to developer proposing the urban mall, move, since either one of them is go- holds a seeming advantage. ing to create jobs,”said Ms.Cintron, “We have a letter of intent from who added that she prefers the ice a major institutional partner to firink but would support whichever nance 70% of our project’s cost,”said plan the EDC crowns. Adam Zucker, an executive at For years, the city has wanted to Youngwoo, who notes his competiconvert the facility into something tor doesn’t have a comparable comthat could become a sparkplug for mitment from a lender. economic activity in the area.An amIce-rink industry insiders, bitious $310 million plan by mega- meanwhile, have mixed opinions developer the Related Cos. in 2009 whether KNIC’s goal of attracting 2 to turn the building into a big-box million visitors annually is realistic. mall was rejected at the last minute. A spokesman for the nation’s largest Despite strong backing from ice center, the Schwan Super Rink Mayor Michael Bloomberg and outside Minneapolis, said that it atothers, it fell victim to intense oppo- tracts nearly 2 million visitors as a See ICE CENTER on Page 17 sition from local groups, who feared Trump casinos win for losing B usiness at Atlantic City was lousy even before Sandy. Profits among the town’s 12 casinos were down 18% through last Sept. 30. Then the superstorm hit and things got a whole lot worse. Resorts closed. Employees were laid off. But through it all, one casino operator is coming out smelling if not like a rose, then something better than what the sea dragged in: Trump Entertainment Resorts Inc., the company that bears the name of the famous Donald. On the day after Christmas, Trump Entertainment disclosed that it hit the jackpot by collecting a $35.5 million check courtesy of the Atlantic City government. What’s more, the city borrowed money to pay Trump. Now the Last year was shaping into another difficult one before Sandy struck. Heading into October, profits at the Trump Plaza were down 34%, according to New Jersey regulatory data, more than any other Atlantic City casino. Oddly enough, it’s the casinos’ financial weakness that made the $35.5 million windfall possible. With revenue and real estate values declining, Trump Entertainment argued in the Tax Court of New Jersey that its property tax bills should be lower, too. Last summer, the casino operator disclosed that the assessed value of Trump Taj Mahal was slashed by 40%, to $1 billion, and the value of Trump Plaza was cut by 66%, to $250 million. In the settlement with Atlantic City, the company was awarded $54 million in refunds on previously paid taxes and credits for future payments. The cash portion of the rebate is more than three times the size of Trump Entertainment’s profits as of last Sept. 30. The package was the largest ever granted an Atlantic City casino operator, according to the Atlantic City Press. Now other rivals are lining up for their own refunds. Convenient access to major business hubs. Subways & Highways just blocks away. COMMERCIAL UNITS WITH FLEXIBLE SPACE. PREBUILT/BUILT TO SUIT www.bushterminal.com W H E R E B U S Iwww.bushterminal.com E S NESS LIV Industrial, Office, Creative, Warehouse/Distribution, Manufacturing, Retail, and Technology. 866.361.0769  lease@bushterminal.com 4 | Crain’s New York Business | January 7, 2013 882 Third Avenue, Brooklyn municipality, which is facing mounting costs as it rebuilds, could be hit with further tax appeals from other struggling casinos. We’ll explain how all this happened in a moment. But first let’s make clear that Mr. Trump, whose real estate organization is the city’s second-largest privately held business, according to Crain’s, doesn’t control Trump Entertainment or even serve on its board. He holds 9.5% of the company’s stock, which doesn’t trade publicly, and makes money from licensing his name and other services. (For example, in 2011 the casino company paid $390,000 to lease his helicopter and bought $197,000 worth of Trump Ice bottled water.) In many ways, Trump casinos, like others in Atlantic City,have suffered for years. In 2009, the company filed for bankruptcy—its third trip to bankruptcy court in two decades. Since then, it and other casino operators have been hurt as gamblers shunned Atlantic City for more attractive places to part with their money. Between 2007 and 2011, Trump Entertainment’s revenue shriveled by about 40%. (Some of the decline reflects the sale of a casino, the Trump Marina, in 2011.) newscom http://www.bushterminal.com

Table of Contents for the Digital Edition of Crains New York - January 7, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
SMALL BUSINESS
BUSINESS PEOPLE
OPINION
REPORT: ECONOMIC OUTLOOK
GREG DAVID
FOR THE RECORD
REAL ESTATE DEALS
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE BREAKFAST
OUT AND ABOUT
SNAPS

Crains New York - January 7, 2013

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