NEW YORK (Reuters) - A New York state agency on Thursday approved a modified plan for Brooklyn's Atlantic Yards development, which is expected to start with a new arena for the Nets professional basketball team whose design has been scaled down.
Many of New York City's mega real estate developments have stalled during the recession, and the rest of the Atlantic Yards project, which could eventually include 16 commercial and apartment buildings, now is expected to be built in phases.
Both Dennis Mullen, who chairs the state agency called the Empire State Development Corp, and the developer, Bruce Ratner of Forest City Ratner, expressed confidence that the entire plan, first unveiled in 2003, would go forward.
Ratner, in a statement that referred to the arena's new name, said: "Our commitment to the project, including the housing, the jobs and of course bringing the Nets to the Barclays Center, has remained steadfast even as the changing economic environment made this project more challenging but also more important."
The first residential building will get start going up about six to nine months after the arena construction begins, the developer said.
But unless Ratner breaks ground on the arena this year, he will lose the benefit of $700 million of low-cost tax-exempt debt.
A Ratner spokesman was not immediately available to comment on a possible investment in the arena by Russia's richest man, Mikhail Prokhorov.
The arena project, which would be built over the state mass transit agency's rail yards, has long been dogged by critics, who say it is a money-loser for the public. Some community groups say it is too dense and too high for Brooklyn.
At least one legal challenge is pending, and one of the project's fiercest critics, a community activist group called Develop Don't Destroy Brooklyn, said it likely will sue the state agency for approving the modified plan without the supplemental environmental review it said is required.
"The likely outcome of today's action by the Empire State Development Corporation is that they will be sued," the group's spokesman, Daniel Goldstein, said in a statement.
