The complicated transaction by Forest City Enterprises, Inc. (NYSE: FCEA
) to sell a majority stake in the 22-acre Atlantic Yards development in Brooklyn, NY, to Shanghai-based Greenland Group Co. moved another step closer to completion this week.
In October, CoStar News reported on the preliminary agreement between Forest City and Greenland to form a joint venture.
This week, that turned into a definitive agreement for a joint venture, expected to close next year, to develop the first two phases of the project.
The joint venture excludes Barclays Center and B2, the first housing tower on the former industrial site. The agreement includes infrastructure, a permanent MTA rail yard, a platform above the rail yard and future residential units.
The Committee on Foreign Investment in the United States (CFIS) and the government of China must still sign off on the deal, among other regulatory requirements.
Under the agreement, Greenland would acquire 70% and co-develop the project with Forest City, with both organizations sharing in all project costs in proportion to their interests. 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.
"To do this in Brooklyn, New York is a dream for all of us at Greenland," said Zhang Yuliang, chairman and president of Greenland Group. "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."