As stated in court, iStar doesn't stand to lose the acreas of properties it
already owns and it has the right to develop them according to an amended or
replaced plan. The plan is just a resolution passed by the city council. It can
be changed at any time. The agreement between the City and Asbury Partners is a
contract with legal weight. It's the provision regarding an arbitration option
that is the crux of the argument now. (see www.asburyradio.com)
As for iStar and the commercial property market in general, I don't believe
it's all that close to coming back. And I'm not sure what they would mean,
since I doubt it will return to 2007 or 2006 prices. The reason I say this is
because Sternlicht, a chief executive of iStar's former parent, Starwood,
recently said he felt the rebirth in the NY commercial property market is an
anomaly true to only the NYC market.
I'll throw this out as possibility: Under the contract with the city, the
WRA, iStar has to complete the infrastructure. Since its legal counsel
mentioned it in court, with an eye toward dropping that commitment, because the
next plan looks like it will call for less density, I think that's something
iStar wants to shake.
#2 commitment is that iStar has to make regular, sizable payments on the
debt the council committed the City to in order to provide Asbury Partners with
cash to upgrade the sewer plant, and perhaps even the boardwalk replacement. So
even if iStar let the City take back the redevelopment rights it would still
owe these obligations.
So I would venture that iStar isn't going to fight too hard to hang onto the
rights and might cut a deal that would leave the city its redevelopment rights
again, but also with the unfinished infrastructure and the bond debt. The City
would be crazy to make that deal BTW. But the City has to be careful that in
severing its ties to the master developer, it doesn't free it from these
commitments.
Thoughts?
Maureen http://www.asburyradio.com
--- In AsburyPark@yahoogroups.com, "dfsavgny" <dfsavgny@...> wrote:
>
>
>
> --- In AsburyPark@yahoogroups.com, "Dave" <dsher4@> wrote:
> >
> > I think the crux of the issue at this point is the following:
> >
> > IStar is not going to back away from 70 million without a fight
> > They are not in a good spot right now economically so they will try to
> > delay things
> > I'm guessing they have a very prestigious law firm defending them who will
> > drag this out in court forever.
> > a 250k bond for legal fees for the town is probably way too low to actually
> > fight this.
> > who is legally representing the town? do they have anywhere near the
> > acumen that Istar's legal firm has.
> >
> > Commercial construction is starting to show signs of life across the
> > country. We analyze this stuff for a living at my firm, it isn't in the
> > papers yet but it will be. How do we make sure we don't miss the next
> > round of redevelopment while istar delays a decision on the beachfront for
> > years?
>
> I think that there is a misunderstanding about the city asking iStar to walk
> away. Perhaps I am wrong but they own what they own and that is a lot of
> property. What I think the default issue is, is that they loose the rights
> under the WRA, not its ownership interests in properties they already own.
> Then for all intents and purposes the WRA as it exists is dead and the city
> can start over. The city is not obligated to condemn other property for
> Partners, etc.I do not think there is anything in the WRA that upon default
> Partners has t give up its property. There may be something about the
> properties that the city actually sold, i.e., the pavilions etc. that they
> city can get back but it has to compensate Partners.
>
> iStar has been very aggressive and successful in foreclosing on high-profile
> failed projects, some here in NYC. They are not developers. I m for the city
> pushing them with litigation because although they will sell their pieces,
> you have to light a match under them. I only wish we could get back the
> development rights but they haven't been the city's for decades I believe in
> any event.
>
> But what we can do with this litigation is to gain leverage to rework the
> plan and make things go forward in the best interest of the city. What the
> city needs are good development minds assisting it.
>
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