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Forest City Enterprises, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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FOREST CITY ENTERPRISES, INC.

Notice of Annual Meeting of Shareholders

To Be Held June 19, 2008

NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of Forest City Enterprises, Inc. (the “Company”) will be held in the 6th floor Riverview Room of the Ritz-Carlton Hotel, Tower City Center, 1515 West Third Street, Cleveland, Ohio 44113, on Thursday, June 19, 2008 at 2:00 p.m., Eastern Daylight Time, for the purpose of considering and acting upon:

	(1)		The election of fifteen (15) directors, each to hold office until the next annual shareholders’ meeting and until a successor shall be elected and qualified. Four (4) directors will be elected by holders of Class A Common Stock and eleven (11) by holders of Class B Common Stock.
	(2)		The proposed amendment and restatement of the 1994 Stock Plan.
	(3)		The proposed amendment and restatement of the Executive Short-Term Incentive Plan.
	(4)		The proposed amendment and restatement of the Executive Long-Term Incentive Plan.
	(5)		The ratification of PricewaterhouseCoopers LLP as independent registered public accounting firm for the Company for the fiscal year ending January 31, 2009.
	(6)		Such other business as may properly come before the meeting or any adjournment or postponement thereof.

Shareholders of record at the close of business on April 21, 2008 will be entitled to notice of and to vote at such annual meeting or any adjournment or postponement thereof.

BY THE ORDER OF THE BOARD OF DIRECTORS

Geralyn M. Presti, Secretary

Cleveland, Ohio
April 30, 2008

IMPORTANT: It is important that your stock be represented at the meeting. Whether or not you intend to be present, please mark, date and sign the appropriate enclosed proxy or proxies and send them by return mail in the enclosed envelope, which requires no postage if mailed in the United States.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE SHAREHOLDER MEETING TO BE HELD ON JUNE 19, 2008

The Proxy Statement, Annual Report on Form 10-K, Summary Annual Report and Supplemental Package
are available on the Investor Relations page at www.forestcity.net.

Table of Contents

	Page
Solicitation and Revocation of Proxies		1
Outstanding Shares and Voting Rights		1
Election of Directors		1
Director Compensation		7
Principal Security Holders		9

Corporate Governance		10
Meetings and Committees of the Board of Directors		13
Compensation Committee Interlocks and Insider Participation		16
Compensation Discussion & Analysis		17
Compensation Committee Report		26
Potential Payments upon Termination		26
Executive Compensation Tables		29
Equity Compensation Plan Information		33
Certain Relationships and Related Transactions		34
Section 16(a) Beneficial Ownership Reporting/Compliance		36
Audit Committee Report		36
Proposal to Approve the Forest City Enterprises, Inc. 1994 Stock Plan (As Amended and Restated as of June 19, 2008)		37
Proposal to Approve the Forest City Enterprises, Inc. Executive Short-Term Incentive Plan (As Amended and Restated as of June 19, 2008)		43
Proposal to Approve the Forest City Enterprises, Inc. Executive Long-Term Incentive Plan (As Amended and Restated as of June 19, 2008)		45
Ratification of Independent Registered Public Accounting Firm		46
Independent Registered Public Accounting Firm Fees and Services		47
Shareholder Proposals for 2009 Annual Meeting		47
Other Business		47
Cost and Method of Proxy Solicitation		48

Exhibits
Exhibit A –1994 Stock Plan (As Amended and Restated as of June 19, 2008)		A-1
Exhibit B – Executive Short-Term Incentive Plan (As Amended and Restated as of June 19, 2008)		B-1
Exhibit C – Executive Long-Term Incentive Plan (As Amended and Restated as of June 19, 2008)		C-1

FOREST CITY ENTERPRISES, INC.

Proxy Statement

Solicitation and Revocation of Proxies

The enclosed proxy or proxies relating to shares of Class A Common Stock and Class B Common Stock are solicited on behalf of the Board of Directors of Forest City Enterprises, Inc. (“Forest City,” “we,” “us,” or “our”) for use at the annual meeting of shareholders to be held on Thursday, June 19, 2008 at 2:00 p.m., Eastern Daylight Time, in the 6th floor Riverview Room of the Ritz-Carlton Hotel, Tower City Center, 1515 West Third Street, Cleveland, Ohio 44113. This proxy statement and related form of proxy are being first sent to shareholders on or about April 30, 2008. A shareholder giving a proxy may revoke it by notifying our Secretary in writing or at the annual meeting, without affecting any vote previously taken.

Outstanding Shares and Voting Rights

As of April 21, 2008, the record date fixed for the determination of shareholders entitled to vote at the annual meeting, there were outstanding 78,934,699 of our shares of Class A Common Stock, par value $.33 1/3 per share (the “Class A Common Stock”), and 24,003,596 of our shares of Class B Common Stock, par value $.33 1/3 per share (the “Class B Common Stock”), (collectively, “Common Stock”). At the annual meeting, the holders of Class A Common Stock will be entitled as a class to elect four (4) directors and will be entitled to one vote per share for this purpose. Michael P. Esposito, Jr., Joan K. Shafran, Louis Stokes and Stan Ross have been nominated for election to serve as these directors. At the annual meeting, the holders of Class B Common Stock will be entitled as a class to elect eleven (11) directors and will be entitled to one vote per share for this purpose. Albert B. Ratner, Samuel H. Miller, Charles A. Ratner, James A. Ratner, Jerry V. Jarrett, Ronald A. Ratner, Scott S. Cowen, Brian J. Ratner, Deborah Ratner Salzberg, Bruce C. Ratner and Deborah L. Harmon have been nominated for election to serve as these directors. Except for the election of directors, the holders of Class A Common Stock and Class B Common Stock will vote together on all other matters presented at the meeting and will be entitled to one (1) vote per share of Class A Common Stock and ten (10) votes per share of Class B Common Stock held as of the record date.

If notice in writing is given by any shareholder to our President, a Vice President or the Secretary not less than forty-eight hours before the time fixed for the holding of the meeting that such shareholder desires cumulative voting with respect to the election of directors by a class of shareholders to which the holder belongs, and if an announcement of the giving of such notice is made upon the convening of the meeting by the Chairman or Secretary or by or on behalf of the shareholder giving such notice, each holder of shares of that class will have the right to accumulate such voting power as the holder possesses at such election with respect to shares of that class. Each holder of shares of Class A Common Stock or Class B Common Stock, as the case may be, will have as many votes as equal the number of shares of that class of common stock owned by that holder multiplied by the number of directors to be elected by the holders of that class of common stock. These votes may be distributed among the total number of directors to be elected by the holders of that class of common stock or distributed among any lesser number, in such proportion as the holder may desire.

Under Ohio law and our Amended Articles of Incorporation, broker non-votes and abstaining votes will be counted for purposes of determining whether a quorum is present at the annual meeting, but will not be counted in favor of or against any nominee for election to our Board of Directors. Abstentions will be counted as cast with respect to a proposal and have the same effect as votes against the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2009. Broker non-votes will not be counted as cast for any other proposal.

Election of Directors

It is intended that proxies will be voted for the election of the nominees named in the table below as our directors unless authority is withheld. Each is to serve until the next annual shareholders’ meeting and until their successor is elected and qualified. In the event any one or more of such nominees unexpectedly becomes unavailable for election, proxies will be voted in accordance with the best judgment of the proxy holder. All nominees are presently our directors.

At February 29, 2008, the Ratner, Miller and Shafran families, which include members of our current Board of Directors and certain executive officers not including Bruce C. Ratner (“Family Interests”) owned 14.9% of the Class A Common Stock and 77.9% of the Class B Common Stock. RMS, Limited Partnership (“RMSLP”), which owned 78.2% of the Class B Common Stock outstanding as of the record date, is a limited partnership, comprised of the Family Interests, with eight individual general partner positions, currently consisting of: Samuel H. Miller, Co-Chairman of the Board of Directors and our Treasurer; Charles A. Ratner, our President and Chief Executive Officer and Director; Ronald A. Ratner, our Executive Vice President and Director; Brian J. Ratner, our Executive Vice President and Director; Deborah Ratner Salzberg, President of Forest City Washington, Inc., one of our subsidiaries, and Director; Joan K. Shafran, Director; Joseph Shafran; and Abraham Miller. Joan K. Shafran is the sister of Joseph Shafran. Charles A. Ratner, James A. Ratner and Ronald A. Ratner are brothers. Albert B. Ratner is the father of Brian J. Ratner and Deborah Ratner Salzberg and is first cousin to Charles A. Ratner, James A. Ratner, Ronald A. Ratner, Bruce C. Ratner, Joan K. Shafran and Joseph Shafran. Samuel H. Miller was married to Ruth Ratner Miller (now deceased), a sister of Albert B. Ratner, and is the father of Abraham Miller.

Under the partnership agreement of RMSLP (the “Agreement”), the voting power of the general partners representing a family branch is determined by dividing the interest of the family branch they represent by the aggregate interests of all family branches. The voting power of the general partner or general partners representing a family branch may not be divided or apportioned but must be voted together as a whole. If the general partners representing a family branch are unable to agree on how to vote that branch, the total voting power of the other general partners is computed without reference to the voting power otherwise available to that family branch. General partners holding 60% of the total voting power (excluding the voting power of a family branch, if any, unable to agree on how to vote on a particular matter) of RMSLP determine how to vote the Class B Common Stock held by RMSLP.

The following table sets forth the shares of Class B Common Stock held by RMSLP at February 29, 2008, which under the Agreement is voted by the general partners of RMSLP, who under Rule 13d-3 of the Securities Exchange Act of 1934, are deemed to be the beneficial owners of those shares of Class B Common Stock:

				Shares of Class B				Percent of RMSLP’s
		Name of		Common Stock				Holdings of Class B
Family Branch		General Partners		Held through RMSLP				Common Stock
Max Ratner		Charles A. Ratner Ronald A. Ratner			9,169,467				48.8	%
Albert Ratner		Brian J. Ratner Deborah Ratner Salzberg			4,928,658				26.3	%
Samuel H. Miller		Samuel H. Miller			998,206				5.3	%
Nathan Shafran		Joan K. Shafran Joseph Shafran			2,580,808				13.7	%
Ruth Miller		Abraham Miller			1,101,854				5.9	%
Total					18,778,993				100.0	%

The following table sets forth the beneficial ownership of shares of Class A and Class B Common Stock as of February 29, 2008 of each director, nominee, and the other Named Executive Officers (as defined on page 29), as well as all directors and executive officers as a group. Except as otherwise noted, each person has had the principal occupation shown for at least the last five years.

Number of Shares of Common Stock Beneficially Owned

Class A

Assuming

Class A

Percent

Conversion of

Percent

Class B

Percent

Director

Common

of

Class B by the

of

Common

of

Name

Occupation and Age

Since

Stock(h)(j)

Class(h)

Beneficial Owner(i)(j)

Class(i)

Stock

Class

NOMINEES

(a) Michael P. Esposito, Jr.

Non-Executive Chairman of Primus Guaranty Ltd. (seller of credit protection); Non-Executive Chairman of Security Capital Assurance Ltd. (guarantee insurance). Retired in December 2007 as Non-Executive Chairman of XL Capital Ltd. (insurance). Retired Executive Vice President Chief Control Compliance and Administrative Officer, The Chase Manhattan Bank, N.A. (banking). Director of Annuity & Life Ltd. (insurance). Age 68 (c)(d)(e)

1995

131,364(1)

0.17

%

131,364

0.17

%

-

-

(a) Joan K. Shafran

Chief Operating Officer, Powell Partners Limited (investments) and Executive Managing Partner, The Berimore Co. (investments). Age 60

1997

316,177(2)

0.40

%

19,108,670(2)(3)

19.60

%

18,792,493(3)

77.58%

								Number of Shares of Common Stock Beneficially Owned
														Class A
														Assuming
								Class A		Percent				Conversion of				Percent				Class B				Percent
				Director				Common		of				Class B by the				of				Common				of
Name		Occupation and Age		Since				Stock(h)(j)		Class(h)				Beneficial Owner(i)(j)				Class(i)				Stock				Class
NOMINEES
(a) Louis Stokes		Senior Counsel – Attorney-at-Law, Squire, Sanders & Dempsey LLP since 1999 (law) and Retired Member of The United States Congress from 1969 to 1999. Age 83 (d)(e)			1999			67,950	(4)		0.09	%			67,950				0.09	%				-		-
(a) Stan Ross		Chairman of the Board, University of Southern California Lusk Center for Real Estate and Senior Fellow (education), Retired Vice Chairman, Ernst & Young (accounting & consulting) and Certified Public Accountant. Age 72 (c)(d)			1999			66,300	(5)		0.08	%			66,300				0.08	%				-		-
(b) Albert B. Ratner		Our Co-Chairman of the Board of Directors since June 1995, Vice Chairman of the Board from June 1993 to June 1995, Chief Executive Officer from June 1993 to June 1995 and President prior to July 1993. Age 80 (f)			1960			2,134,547	(6)		2.71	%		2,140,833		(6)(7)			2.72	%		6,286			(7)		0.03	%
(b) Samuel H. Miller		Our Co-Chairman of the Board of Directors since June 1995, Chairman of the Board from June 1993 to June 1995 and Vice Chairman of the Board, Chief Operating Officer prior to June 1993, Treasurer since December 1992. Age 86 (f)			1960			1,097,662	(8)		1.39	%		19,876,655		(8)(9)			20.39	%		18,778,993			(9)		77.52	%
(b) Charles A. Ratner		Our President since June 1993, Chief Executive Officer since June 1995, Chief Operating Officer from June 1993 to June 1995 and Executive Vice President prior to June 1993. Director of American Greetings Corporation (greeting cards) and RPM, Inc. (lubricants). Age 66 (f)			1972			2,386,799	(10)		3.03	%		21,165,792		(10)(11)			21.70	%		18,778,993			(11)		77.52	%
(b) James A. Ratner		Our Executive Vice President since March 1988. Age 63 (f)			1984			3,949,763	(12)		5.02	%		3,949,763		(12)(13)			5.02	%		-			(13)	-
(b) Jerry V. Jarrett		Retired Chairman and Chief Executive Officer of Ameritrust Corporation (banking). Age 76 (c)(d)			1984			35,900	(14)		0.05	%			35,900				0.05	%				-		-

								Number of Shares of Common Stock Beneficially Owned
														Class A
														Assuming
								Class A		Percent				Conversion of				Percent				Class B				Percent
				Director				Common		of				Class B by the				of				Common				of
Name		Occupation and Age		Since				Stock(h)(j)		Class(h)				Beneficial Owner(i)(j)				Class(i)				Stock				Class
NOMINEES
(b) Ronald A. Ratner		Our Executive Vice President since March 1988. Age 61 (f)			1985			2,194,729	(15)		2.79	%		20,973,722		(15)(16)			21.51	%		18,778,993		(16)			77.52	%
(b) Scott S. Cowen		President, Tulane University (education) since July 1998, Dean and Professor of Weatherhead School of Management, Case Western Reserve University (education) prior to July 1998. Director of JoAnn Stores, Inc. (specialty retailing), Newell Rubbermaid Corporation (consumer products) and American Greetings Corporation (greeting cards). Age 61 (d)(e)			1989			36,000	(17)		0.05	%			36,000				0.05	%			-			-
(b) Brian J. Ratner		Our Executive Vice President since June 2001. Age 50 (f)			1993			931,727	(18)		1.18	%		19,710,720		(18)(19)			20.21	%		18,778,993		(19)			77.52	%
(b) Deborah Ratner Salzberg		President of Forest City Washington, Inc., our subsidiary. Age 54 (f)			1995			732,265	(20)		0.93	%		19,511,258		(20)(21)			20.01	%		18,778,993		(21)			77.52	%
(b) Bruce C. Ratner		Our Executive Vice President since November 2006, Chief Executive Officer of Forest City Ratner Companies since 1987. Age 63 (f)			2007			1,455,069	(22)		1.82	%			1,455,069				1.82	%			-			-
(b) Deborah L. Harmon		President, Harmon & Co. and Principal, Caravel Fund Management since January 2008, President and Chief Investment Officer of J.E. Robert Companies from 2001 through 2007. Age 48 (d)			2008			-			-				-				-				-			-
OTHER NAMED EXECUTIVE OFFICER
Thomas G. Smith		Our Executive Vice President from October 2000, Chief Financial Officer from 1985 and Secretary from 1992 until his retirement on April 1, 2008. Age 67 (f)(g)						26,255	(23)		0.03	%		27,769		(23)			0.04	%			1,514				0.01	%
ALL DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS AS A GROUP (18 in number)								10,643,341	(24)		13.20	%		29,446,637		(24)(25)			29.62	%		18,803,296		(25)			77.62	%

	(1)		Includes 18,900 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or vesting within 60 days thereafter.
	(2)		Includes 113,324 shares of Class A Common Stock held in partnerships in which Joan K. Shafran has shared power of voting and disposition. Ms. Shafran has beneficial ownership of 94,236 shares of Class A Common Stock held in trusts and a foundation: 25,308 shares for which she is trustee and has shared power of voting and disposition and 68,928 shares for which she has sole power of voting and disposition.
	(3)		Includes 13,500 shares of Class B Common Stock held in a partnership in which Joan K. Shafran has shared power of voting and disposition. Ms. Shafran’s beneficial ownership of the remaining 18,778,993 shares of Class B Common Stock reflects her status as a general partner of RMSLP. See discussion of RMSLP on pages 1-2.
	(4)		Includes 60,300 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.
	(5)		Represents 66,300 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.

	(6)		Albert B. Ratner has beneficial ownership of 2,019,572 shares of Class A Common Stock held in trusts and foundations: 1,396,265 shares for which he is a trustee with shared power of voting and disposition and 623,307 shares for which he has sole power of voting and disposition. Mr. Ratner also has beneficial ownership of 112,664 shares held in trusts for which he is trust advisor and has shared power of voting and disposition.
	(7)		Does not reflect the following shares of which Albert B. Ratner disclaims beneficial ownership: 5,374,418 shares of Class B Common Stock held in trusts for which he is trustee and 275,112 shares held in trusts for which he is trust advisor, of which 2,230,658 shares are held in the Albert Ratner Family Branch of RMSLP, 2,909,941 shares are held in the Max Ratner Family Branch of RMSLP and 508,931 shares are held in the Ruth Miller Family Branch of RMSLP. See discussion of RMSLP on pages 1-2.
	(8)		Samuel H. Miller has beneficial ownership of 1,087,254 shares of Class A Common Stock held in trusts and a foundation: 848,505 shares for which he has sole power of voting and disposition and 238,749 shares for which he is a trustee with shared power of voting and disposition.
	(9)		Samuel H. Miller’s beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP on pages 1-2.
	(10)		Charles A. Ratner has beneficial ownership of 2,305,634 shares of Class A Common Stock held in trusts and foundations for which he is trustee and has shared power of voting and disposition. Mr. Ratner has beneficial ownership of 7,965 shares held in trusts for which he is trust advisor and has shared power of voting and disposition. Includes 73,200 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.
	(11)		Charles A. Ratner’s beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP on pages 1-2.
	(12)		James A. Ratner has beneficial ownership of 3,836,216 shares of Class A Common Stock held in trusts and foundations: 3,828,501 shares for which he is trustee and has shared power of voting and disposition and 7,715 shares for which he has sole power of voting and disposition. Mr. Ratner has beneficial ownership of 67,647 shares held in trusts for which he is trust advisor and has shared power of voting and disposition. Includes 45,900 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.
	(13)		Does not reflect the following shares of which James A. Ratner disclaims beneficial ownership: 5,084,604 shares of Class B Common Stock held in trusts for which he is trustee and 922,866 shares held in trusts for which he is trust advisor, of which 4,372,170 shares are held in the Max Ratner Family Branch of RMSLP, 1,159,250 shares are held in the Albert Ratner Family Branch of RMSLP and 476,050 shares are held in the Ruth Miller Family Branch of RMSLP. See discussion of RMSLP on pages 1-2.
	(14)		Includes 18,900 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or vesting within 60 days thereafter.
	(15)		Ronald A. Ratner has beneficial ownership of 2,148,829 shares of Class A Common Stock held in trusts: 1,240,534 shares for which he is trustee and has shared power of voting and disposition and 908,295 shares for which he has sole power of voting and disposition. Includes 45,900 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.
	(16)		Ronald A. Ratner’s beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP on pages 1-2.
	(17)		Includes 29,700 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.
	(18)		Brian J. Ratner has beneficial ownership of 867,477 shares of Class A Common Stock held in trusts and foundations: 863,127 shares for which he is trustee and has shared power of voting and disposition and 4,350 shares for which he has sole power of voting and disposition. Mr. Ratner has beneficial ownership of 36,800 shares held in trusts for which he is trust advisor and has shared power of voting and disposition. Includes 27,450 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.
	(19)		Brian J. Ratner’s beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP on pages 1-2.
	(20)		Deborah Ratner Salzberg has beneficial ownership of 668,615 shares of Class A Common Stock held in trusts and foundations: 664,265 shares for which she is trustee and has shared power of voting and disposition and 4,350 shares for which she has sole power of voting and disposition. Ms. Ratner Salzberg has beneficial ownership of 36,800 shares held in trusts for which she is trust advisor and has shared power of voting and disposition. Includes 26,850 shares that were issuable upon the exercise of stock options vested at February 29, 2008 or will vest within 60 days thereafter.
	(21)		Deborah Ratner Salzberg’s beneficial ownership of these shares of Class B Common Stock reflects her status as a general partner of RMSLP. See discussion of RMSLP on pages 1-2.
	(22)		On February 29, 2008, Bruce C. Ratner and certain individuals and entities affiliated with Bruce C. Ratner held 3,894,232 Class A Common Units (“Units”) in Forest City Master Associates III, LLC that were obtained in a transaction designed to increase Forest City’s ownership interest in 30 properties and service companies that were owned jointly by us and Bruce C. Ratner. See “Transactions With Bruce C. Ratner and His Affiliates” beginning on page 34 for a more detailed description of the transaction. The transaction closed on November 8, 2006. After a one-year lock-up period, (i.e. after November 8, 2007), the Units may be exchanged for an equal number of shares of our Class A Common Stock or, at our option, for cash equal to the then-current market price of our Class A Common Stock. Bruce C. Ratner claims beneficial ownership in 1,026,909 units held by him and 428,160 units held in a trust for which he is trustee. Bruce C. Ratner disclaims beneficial ownership in 2,220,538 units held in trusts in which he is not trustee and 218,625 units held directly by others.
	(23)		Includes 19,650 shares that were issuable upon the exercise of stock options and restricted stock vested at February 29, 2008 or will vest within 60 days thereafter.
	(24)		These shares of Class A Common Stock represent all the shares in which beneficial ownership is claimed by these persons. Shares for which beneficial ownership have been claimed by more than one person have been counted only once in this category. Includes 455,110 shares that were issuable upon the exercise of stock options and restricted stock vested at February 29, 2008 or will vest within 60 days thereafter, and 1,455,069 Class A Common Units (see note 22 above).

	(24)		These shares of Class A Common Stock represent all the shares in which beneficial ownership is claimed by these persons. Shares for which beneficial ownership have been claimed by more than one person have been counted only once in this category. Includes 455,110 shares that were issuable upon the exercise of stock options and restricted stock vested at February 29, 2008 or will vest within 60 days thereafter, and 1,455,069 Class A Common Units (see note 22 above).
	(25)		These shares of Class B Common Stock represent all the shares in which beneficial ownership is claimed by these persons. Included in this total are 18,778,993 shares of Class B Common Stock that are held by RMSLP. Shares for which beneficial ownership have been claimed by more than one person have been counted only once in this category.
	(a)		Nominated for election by holders of Class A Common Stock.
	(b)		Nominated for election by holders of Class B Common Stock.
	(c)		Member of the Audit Committee.
	(d)		Member of the Compensation Committee.
	(e)		Member of the Corporate Governance and Nominating Committee.
	(f)		Officer and/or director of various subsidiaries.
	(g)		This officer is not a director.
	(h)		Does not reflect potential conversion of Class B Common Stock to Class A Common Stock.
	(i)		Reflects potential conversion of all Class B Common Stock held by the nominee or officer listed to Class A Common Stock. Shares of Class B Common Stock are convertible pursuant to their terms into shares of Class A Common Stock at any time on a one-for-one basis.
	(j)		This column includes, if any, Class A stock options that were exercisable on February 29, 2008 or will be exercisable within 60 days after such date.

We have been advised that the shares owned by RMSLP and otherwise owned by the Families Interests will be voted for the approval of the election of the directors nominated. If such shares are voted for approval, then such vote will be sufficient to elect the nominees voted on by the Class B Common Stock shareholders.

Voting Agreement: On November 8, 2006, we entered into a Voting Agreement with RMSLP, Powell Partners Limited, Joseph Shafran, and Bruce C. Ratner. Pursuant to the terms of the agreement, the Board of Directors appointed Bruce C. Ratner as a Class B director. Additionally, RMSLP, Powell Partners Limited and Joseph Shafran have agreed to vote the shares owned by them for the election of Bruce C. Ratner to the Board of Directors at each meeting of our shareholders. If such shares are voted in accordance with the Voting Agreement, then such vote will be sufficient to elect Bruce C. Ratner as a Class B director. The Voting Agreement will terminate under any of the following three circumstances: (i) Bruce C. Ratner’s death or his physical or mental incapacity that prevents him from performing all duties required of our directors; (ii) Bruce C. Ratner and his affiliates no longer hold at least 1.5 million Class A Common Units in Forest City Master Associates III, LLC (or stock issued upon exchange of the Class A Common Units) while he is employed by us or at least 2.5 million Class A Common Units (or stock issued upon exchange of the Class A Common Units) if he is no longer employed by us; or (iii) Bruce C. Ratner materially breaches his non-compete agreement with us or any written policy generally applicable to all members of our Board of Directors. See pages 34-35 for further discussion about Forest City Master Associates III, LLC.

Director Compensation

A new director compensation policy was adopted effective February 1, 2008, which is outlined in the following chart. The previous policy is summarized in note (1) to the Director Compensation Table. Compensation is paid to nonemployee directors only. Directors who are also our employees receive no additional compensation for service as directors.

	Director Compensation Policy			Amount (1)
	Annual Board Retainer				$50,000
	Annual Stock Award to Independent Directors (2)				$100,000
	Annual Retainer to Independent Director Serving as “Presiding Director”				$12,500
	Annual Retainer to Committee Chairman for:
	Audit Committee				$24,000
	Compensation Committee				$16,000
	Corporate Governance and Nominating Committee				$12,000
	Annual Retainer to Committee Members (other than Chairman) for:
	Audit Committee				$12,000
	Compensation Committee				$8,000
	Corporate Governance and Nominating Committee				$6,000
	Other Fees for:		(fees per day)
	Attending other formal meetings in their capacity as directors not held				$1,500
	on the same day as a board meeting or board committee meeting,
	such as Executive Committee and strategic planning meetings.
	Attending special meetings or performing special services in their				$1,500
	capacity as members of a board committee, in each case as
	determined and approved by the applicable board
	committee.
	Director Stock Ownership Requirement:
	Independent directors have up to five years to accumulate ownership of at least 5,000 shares of our stock. The shares may be acquired through direct acquisition, exercise of stock options, vesting of restricted stock or accumulation of phantom stock in their deferred compensation plan.

	(1)		Annual retainers are paid quarterly.
	(2)		Independent directors may choose between stock options and/or restricted stock in 25% multiples. The default selection is a 50%-50% mix if no choice is made. All grants have graded vesting over three years. The number of Class A Common Stock options granted is determined by dividing the amount of award allocated to stock options by the Black-Scholes fair value, and the number of shares of restricted Class A Common Stock is determined by dividing the amount of award allocated to restricted stock by the closing price of the stock on the date of grant.

The Deferred Compensation Plan for Nonemployee Directors permits nonemployee members of the Board of Directors to defer 50% or 100% of their annual board retainer. Directors electing to participate select either a cash investment option or stock investment option for fees deferred during the year. Fees deferred to the stock investment option are deemed to be invested in our Class A Common Stock (the “Phantom Shares”). Dividends earned on Phantom Shares are deemed to be reinvested in more shares. After the participant ceases to be our director, the Phantom Shares accumulated in the participant’s account will be paid out in shares of Class A Common Stock or cash, as elected by the participant. There were 10,580 Phantom Shares accumulated in participants’ accounts as of January 31, 2008. The Plan does not limit the number of shares that can be issued under the stock investment option.

The Corporate Governance and Nominating Committee annually reviews the policy of independent/nonemployee director compensation and stock ownership requirements.

Director Compensation Table

The information presented in the following table is for the year ended January 31, 2008. All other directors not listed are employees of Forest City and receive no compensation in their capacity as director.

																								Change in Pension
																								Value and
																								Nonqualified
				Fees Earned or																				Deferred
				Paid in Cash					Stock Awards					Option Awards					Non-Equity Incentive					Compensation					All Other Compensation
	Name			($) (1)					($)					($) (2)					Plan Compensation ($)					Earnings ($)					($) (3)					Total ($)
	(a)			(b)					(c)					(d)					(e)					(f)					(g)					(h)
	Scott S. Cowen			$	71,500				$	-				$	110,507				$	-				$	-				$	-				$	182,007
	Michael P. Esposito, Jr.			$	89,500				$	-				$	214,605				$	-				$	-				$	-				$	304,105
	Jerry V. Jarrett			$	80,500				$	-				$	214,605				$	-				$	-				$	-				$	295,105
	Stan Ross			$	68,500				$	-				$	214,605				$	-				$	-				$	-				$	283,105
	Joan K. Shafran(4)			$	53,500				$	-				$	-				$	-				$	-				$	-				$	53,500
	Louis Stokes			$	59,500				$	-				$	214,605				$	-				$	-				$	-				$	274,105

	(1)		For the year ended January 31, 2008, each of our nonemployee directors received an annual retainer of $40,000 and a $1,500 attendance fee for attending each Board of Directors meeting. Each nonemployee director received fees of $1,500 for committee members and $3,000 for committee chairmen for attending board committee meetings. Fees were doubled for committee meetings lasting longer than three hours. The “presiding director” of the executive director sessions received an annual fee of $6,000. For each formal meeting with our officers not held on the same day as a board meeting or board committee meeting or each special meeting, each nonemployee director received $1,500 per day for attendance in their capacity as director. Independent directors received an annual Class A Common Stock option grant of approximately 11,000 shares.
	(2)		The amount reported in column (d) for each director reflects the amount of the fair value of stock options that was recognized in our financial statements for the year ended January 31, 2008 under SFAS 123 (Revised), “Shared-Based Payment” (“SFAS No. 123(R)”). Costs were recognized for stock option grants made in 2003 through 2007. Costs are recognized for financial reporting purposes on a straight-line basis over the vesting period of the options. Beginning with the 2006 grant, cost recognition can be accelerated when the optionee reaches retirement age (as defined in the 1994 Stock Plan) during the nominal vesting period. Costs of the 2006 and 2007 option grants for Messrs. Esposito, Jarrett, Ross and Stokes were accelerated. The costs for Scott S. Cowen’s stock options were not accelerated because he will not reach retirement age during the nominal vesting periods of the option grants.
			The fair value of stock option grants are estimated using the Black-Scholes option-pricing model. The assumptions used in the fair value calculations are described in Footnote O, “Stock-Based Compensation”, to our consolidated financial statements for the year ended January 31, 2008, which are included in our Annual Report on Form 10-K filed with the SEC on March 31, 2008. During the year ended January 31, 2008, each of the independent directors in the above table was granted 10,800 stock options having a total grant-date fair value of $185,220. The options have an exercise price of $65.35, which was the closing market price of the underlying stock on the date of grant. The aggregate number of stock options outstanding at January 31, 2008 for Messrs. Cowen, Esposito, Jarrett, Ross and Stokes were 54,000, 43,200, 43,200, 90,600 and 84,600, respectively.
	(3)		Column (g) does not include our incremental cost for the use of our airplane by directors for attending board of directors meetings and committee meetings because such use is deemed to be a business expense. The total incremental cost of airplane usage by all directors amounted to $48,594.
	(4)		Joan K. Shafran is a nonemployee director, but is not an independent director.

Principal Security Holders

Unless otherwise indicated, the following table sets forth the security ownership as of February 29, 2008 of all other persons who beneficially own 5% or more of our Common Stock.

		Number of Shares of Common Stock Beneficially Owned
										Class A
										Assuming
		Class A								Conversion of								Class B
		Common				Percent				Class B by the				Percent				Common				Percent
Name and Address		Stock(a)				of Class(a)				Beneficial Owner(b)				of Class(b)				Stock				of Class
Third Avenue Management LLC			18,430,239	(1)			23.42	%			18,456,239	(1)			23.44	%			26,000	(1)			0.11	%
622 Third Avenue, 32nd Floor
New York, NY 10017
Private Capital Management, L.P.			4,587,213	(2)			5.83	%			5,947,982	(2)			7.43	%			1,360,769	(2)			5.62	%
8889 Pelican Bay Boulevard, Suite 500
Naples, FL 34108
Morgan Stanley & Co. Incorporated			6,733,227	(3)			8.56	%			6,733,227	(3)			8.56	%			-				-
1585 Broadway
New York, NY 10036
Wellington Management Company, LLP			4,055,631	(4)			5.15	%			4,055,361	(4)			5.15	%			-				-
75 State Street
Boston, MA 02109
Kinetics Asset Management, Inc.			3,942,470	(5)			5.01	%			3,942,470	(5)			5.01	%			-				-
470 Park Avenue South, 4th Floor South
New York, NY 10016
Columbia Wanger Asset Management, L.P.			111,000	(6)			0.14	%			1,509,000	(6)			1.88	%			1,398,000	(6)			5.77	%
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Joseph Shafran			477,517	(7)			0.61	%			19,270,010	(7)			19.76	%			18,792,493	(7)			77.58	%
Paran Management Company, Ltd.
2720 Van Aken Boulevard, Suite 200
Cleveland, OH 44120
Abraham Miller			54,486	(8)			0.07	%			18,833,479	(8)			19.32	%			18,778,993	(8)			77.52	%
Graffiti, Inc.
3111 Carnegie Avenue
Cleveland, OH 44115
Ratner, Miller & Shafran Family Interests			11,752,069	(9)			14.89	%			30,624,798	(9)			31.32	%			18,872,729	(9)			77.91	%
(see page 1)
Terminal Tower
50 Public Square, Suite 1600
Cleveland, OH 44113

	(1)		Third Avenue Management LLC (“TAM”), a Delaware limited liability company, is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940. TAM has sole power of voting for 17,857,206 shares and sole power of disposition of 18,430,239 shares of Class A Common Stock. Various other Third Avenue investment companies registered under the Investment Company Act of 1940 have the right to receive dividends and sales proceeds from certain of the shares reported by TAM. Various separately-managed accounts for whom TAM acts as investment advisor have the right to receive dividends and sales proceeds from certain of the shares reported by TAM. The number of shares of Class A Common Stock beneficially owned represent shares beneficially owned at December 31, 2007 as disclosed in Schedule 13G filed with the SEC by the Principal Security Holder. The number of shares of Class B Common Stock beneficially owned represent shares beneficially owned at December 31, 2007 as disclosed in a Questionnaire for 5% Beneficial Owners provided to us by the Principal Security Holder.
	(2)		Private Capital Management, L.P. (“PCM”), a Delaware limited partnership, is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940. PCM has sole dispositive and voting power of 212,210 shares of Class A Common Stock. PCM exercises shared dispositive and voting power of 4,375,003 shares of Class A Common Stock. The number of shares of Class A Common Stock beneficially owned represents shares beneficially owned at January 31, 2008 as disclosed in Schedule 13G/A filed with the SEC by the Principal Security Holder. PCM has sole dispositive and voting power of 87,400 shares of Class B Common Stock. PCM exercises shared dispositive and voting power of 1,273,369 shares of Class B Common Stock. The number of shares of Class B Common Stock beneficially owned represents shares beneficially owned at December 31, 2007 as disclosed in Schedule 13G/A filed with the SEC by the Principal Security Holder.

	(3)		The securities being reported upon by Morgan Stanley & Co. Incorporated (“Morgan Stanley”) as a parent holding company, are owned or may be deemed to be beneficially owned, by Morgan Stanley Investment Management Inc., an investment adviser registered under Section 203 of the Investment Advisers Act of 1940. Morgan Stanley Investment Management Inc. is a wholly owned subsidiary of Morgan Stanley. Morgan Stanley has sole voting power of 4,972,204 shares of Class A Common Stock, shared voting power of 409 shares of Class A Common Stock and sole dispositive power of 6,733,227 shares of Class A Common Stock. Morgan Stanley Investment Management Inc. has sole voting power of 3,277,689 shares of Class A Common Stock, shared voting power of 409 shares of Class A Common Stock and sole dispositive power of 4,731,749 shares of Class A Common Stock which are included in Morgan Stanley’s totals. The number of shares of Class A Common Stock beneficially owned represent shares beneficially owned at December 31, 2007 as disclosed in Schedule 13G filed with the SEC by the Principal Security Holder.
	(4)		Wellington Management Company, LLP, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 has shared voting power of 3,497,260 shares of Class A Common Stock and shared dispositive power of 4,055,631 shares of Class A Common Stock. The number of shares of Class A Common Stock beneficially owned represent shares beneficially owned at December 31, 2007 as disclosed in Schedule 13G filed with the SEC by the Principal Security Holder.
	(5)		Kinetics Asset Management, Inc. (“Kinetics”) is an institutional investment manager. The number of shares of Class A Common Stock beneficially owned represent shares beneficially owned at December 31, 2007 as disclosed in Form 13F filed with the SEC by the Principal Security Holder. Kinetics has sole voting and dispositive power of all of these shares.
	(6)		Columbia Wanger Asset Management, L.P. (“WAM”), an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, and Columbia Acorn Trust have shared voting and dispositive power of 1,398,000 shares of Class B Common Stock. WAM also has shared voting and dispositive power with respect to 111,000 shares of Class A Common Stock held by clients and managed by WAM. The number of shares of Class A Common Stock beneficially owned represent shares beneficially owned at December 31, 2007 as disclosed in a Questionnaire for 5% Beneficial Owners provided to us by the Principal Security Holder.
	(7)		Joseph Shafran is the brother of Joan K. Shafran, Director. Mr. Shafran has beneficial ownership of 111,574 shares of Class A Common Stock held in two partnerships in which he has shared power of voting and disposition. Mr. Shafran has beneficial ownership of 183,472 shares of Class A Common Stock held in trusts: 25,308 shares for which he is a trustee with shared power of voting and disposition and 158,164 shares for which he has sole power of voting and disposition. Included in the Class B Common Stock are 13,500 shares held in a partnership in which Joseph Shafran has shared power of voting and disposition. Joseph Shafran’s beneficial ownership of the remaining 18,778,993 shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP under “Election of Directors” on pages 1-2.
	(8)		Abraham Miller is the son of Samuel H. Miller, Co-Chairman of the Board of Directors and Treasurer. Abraham Miller has beneficial ownership of 54,486 shares of Class A Common Stock held in trusts: 7,000 shares for which he is a trustee with shared power of voting and disposition and 47,486 shares for which he has sole power of voting and disposition. Abraham Miller’s beneficial ownership of the Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP under “Election of Directors” on pages 1-2.
	(9)		The Ratner, Miller and Shafran families have an ownership interest in the Company as reflected in the Principal Security Holders table. These securities are beneficially owned by members of these families either individually or through a series of trusts, foundations and custodianships. Of the shares of Class B Common Stock listed, RMSLP owns 18,778,993 shares, which represent 77.52% of the Class B Common Stock outstanding at February 29, 2008.
			Certain members of the Ratner, Miller and Shafran families have been nominated for election to serve on our Board of Directors. (See information regarding nominees and directors previously disclosed for further information regarding the beneficial ownership of Common Stock by these individuals).
	(a)		Does not reflect potential conversion of Class B Common Stock to Class A Common Stock.
	(b)		Reflects potential conversion of all Class B Common Stock held by the principal security holder listed to Class A Common Stock. Shares of Class B Common Stock are convertible into shares of Class A Common Stock at anytime on a one-for-one basis.

Corporate Governance

We are managed by our senior management under the direction of the Board of Directors. The Board operates within a comprehensive plan of corporate governance and has adopted, and periodically reviews, policies and procedures to guide it in the discharge of its oversight responsibilities. Those policies & procedures are summarized in this section. Copies of the Corporate Governance Guidelines adopted by our Board, its directorate committee charters, our Code of Legal and Ethical Conduct and other relevant information are set forth or explained in greater detail on our website at www.forestcity.net. References to our website are for your convenience; however, the information contained on our website is not incorporated into this proxy statement or any other report we file with the Securities and Exchange Commission (“SEC”).

If you prefer, we will send you copies of any of these materials upon written request directed to:

Geralyn M. Presti, General Counsel and Secretary
Forest City Enterprises, Inc.
Terminal Tower
50 Public Square, Suite 1360
Cleveland, Ohio 44113
geripresti@forestcity.net

We regularly review our corporate governance policies and practices. The Board also routinely compares our corporate governance policies and practices to those suggested by various groups or authorities active in corporate governance, as well as the requirements of the Sarbanes-Oxley Act of 2002 and the listing standards of the New York Stock Exchange (“NYSE”). These reviews specifically focus on the following areas of corporate governance:

	•		our Corporate Governance Guidelines in general;
	•		our current Board composition and compensation;
	•		our Board and Board committee operation and charters;
	•		certain procedures relating to our Code of Legal and Ethical Conduct;
	•		our director nomination process;
	•		our shareholder communications process; and
	•		director continuing education.

We expect to adopt further changes in the future that the Board believes are the best corporate governance policies and practices for it.

Corporate Governance Guidelines

The Board of Directors believes in establishing a corporate culture of accountability, responsibility and ethical behavior through the careful selection and evaluation of senior management and members of the Board of Directors and by carrying out the responsibilities of the Board of Directors with honesty and integrity. Our Corporate Governance and Nominating Committee performed its annual review of our Corporate Governance Guidelines and did not recommend any changes. Our Corporate Governance Guidelines, among other things, provide for Audit, Compensation and Corporate Governance and Nominating Committees; all members of the Audit Committee to be independent directors; regular sessions of independent directors; an annual self-assessment process for the Board and its committees; succession planning; and new director orientation and continuing director education. These guidelines, as amended, largely document practices and principles already in place at the Board level and are available on our website at www.forestcity.net.

Independence Determinations

We are in a “controlled company” status under the NYSE corporate governance rules because, as of February 29, 2008, the Family Interests controlled 11,752,069 Class A votes and 188,727,290 Class B votes for an aggregate voting percentage of 62.5%. See “Election of Directors” on pages 1-2 for a description of the Family Interests. As a result of our controlled company status, we are not required to have a majority of the Board of Directors composed of independent directors. The Board has determined that all members of our Compensation Committee, Corporate Governance and Nominating Committee and Audit Committee are independent.

The Board has unanimously determined that Messrs. Cowen, Esposito, Jarrett, Ross and Stokes and Ms. Harmon are neither affiliated persons of ours nor do they have any material relationship with us (other than their role as our director) and, therefore, qualify as independent directors within the meaning of all applicable laws and regulations, including the enhanced independence standards for the NYSE.

The enhanced independence standards of the NYSE discussed by the Corporate Governance and Nominating Committee in their review of director independence status are as follows:

A.		No director will qualify as “independent” unless the Board of Directors affirmatively determines that the director has no material relationship with us, either directly or as a partner, shareholder or officer of an organization that has a relationship with us. We will identify which directors are independent and disclose these affirmative determinations.
B.		No director can be independent if the director is, or has been within the last three years, our employee.
C.		No director can be independent whose immediate family member is or has been an executive officer of ours within the last three years.

D.		No director can be independent if the director received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from us, other than (a) director and committee fees, (b) compensation received by a director for former service as an interim Chairman, Chief Executive Officer or other executive officer, (c) compensation received by an immediate family member for service as our employee (other than an executive officer), and (d) pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
E.		No director can be independent if:

	•		the director or an immediate family member is our internal auditor or a current partner of our independent registered public accounting firm;
	•		the director is our internal auditor or a current employee of our independent registered public accounting firm;
	•		the director has an immediate family member who is our internal auditor or a current employee of our independent registered public accounting firm and participates in the audit, assurance or tax compliance (but not tax planning) practice; or
	•		the director or an immediate family member was within the last three years (but is no longer) our internal auditor or a partner or employee of our independent registered public accounting firm and personally worked on our audit within that time.

F.		No director can be independent if the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of our present executives at the same time serves or served on that company’s compensation committee.
G.		No director can be independent if the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1,000,000 or 2% of such other company’s consolidated gross revenues.

In making these independence determinations, the Board considered all of the factors that automatically compromise director independence as specified in the respective independence standards of the SEC and the NYSE, including but not limited to charitable contributions to any charitable organization in which such director serves as an executive officer, and definitively determined that none of those conditions existed. In addition, the Board considered whether any material relationship beyond those factors that automatically compromise director independence existed between either us and/or our management and/or any of their respective affiliates or family members or otherwise between each director or any family member of such director or any entity with which director or family member of such director was employed or otherwise affiliated. For those directors for whom the Board determined there was a relationship, with respect to each of the most recent three completed fiscal years, the Board evaluated the following:

	•		The insurance premiums paid to a company where Michael P. Esposito, Jr. served as chairman of the board until December 2007 and determined that the amount of such premiums in each fiscal year was below the limits set forth in our independence standards;
	•		The fees paid to a law firm where Louis Stokes is senior counsel and determined that the amount of such fees in each fiscal year was below the limits set forth in our independence standards; and
	•		Charitable contributions to various organizations where Messrs. Ross or Jarrett serve as an executive officer, director or trustee and determined that the amount of the contribution to any organization in each fiscal year was below the limits set forth in our independence standards.

The Board also considered the personal investments made by several members of the Ratner family in a public equity fund managed by Deborah L. Harmon’s father. The Corporate Governance and Nominating Committee also reviewed Deborah L. Harmon’s minority ownership of a real estate investment trust that is a minority participant in a loan to one of our subsidiaries. It is determined that such investments do not compromise the independence of Deborah L. Harmon. The Board definitively determined for those directors identified as independent above that any relationship that existed was not material and did not compromise that director’s independence from management. Accordingly, all of these directors are independent under SEC and NYSE requirements, as well as our own Corporate Governance Guidelines.

Communications with the Board

We have established procedures to permit confidential and anonymous (if desired) submissions to the Presiding Director (the chairman of the Corporate Governance and Nominating Committee) regarding concerns about our conduct. Interested parties may make their concerns about us known to the independent or non-management directors by directly mailing Scott S. Cowen, the Presiding Director, a statement of concerns marked “Confidential” and addressed as follows:

Mr. Scott S. Cowen, Presiding Director
c/o General Counsel
“Confidential”
Forest City Enterprises, Inc.
Terminal Tower
50 Public Square, Suite 1360
Cleveland, Ohio 44113

Code of Legal and Ethical Conduct

We require that all directors and employees adhere to our Code of Legal and Ethical Conduct in addressing the legal and ethical issues encountered in conducting their work. The Code of Legal and Ethical Conduct requires, among other things, that our employees avoid conflicts of interest, comply with all laws and other legal requirements and otherwise act with integrity. We require management personnel and newly hired employees to acknowledge receipt and compliance with the Code of Legal and Ethical Conduct and annually distribute the Code of Legal and Ethical Conduct to all employees. In addition, those with supervisory duties are also required to acknowledge their responsibility for both informing and monitoring compliance with the Code of Legal and Ethical Conduct on the part of employees under their supervision.

In December 2007, the Board adopted a Senior Financial Officers Code of Ethical Conduct as an addendum to Code of Legal and Ethical Conduct. The Senior Financial Officers Code of Ethical Conduct formalizes the general standards of honesty, integrity and judgment that we expect of all senior financial officers. We will require all senior financial officers to acknowledge receipt of and compliance with the Code of Ethical Conduct annually.

The Sarbanes-Oxley Act of 2002 requires companies to have procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. We have implemented an anonymous hotline monitored by an external, third-party firm. Our Audit Committee has adopted a policy statement entitled “Employee Complaint Procedures for Accounting and Auditing Matters” establishing those procedures.

Meetings and Committees of the Board of Directors

The Board

Following the appointment of Deborah L. Harmon to the Board on April 1, 2008, our Board consists of six independent members and nine members of the Ratner, Miller and Shafran families, including eight members of management and one non-management family member. Biographical information and information about the Board committees on which our directors serve are set forth in “Election of Directors” on pages 1-6 of this proxy statement.

During the year ended January 31, 2008, our Board of Directors held four regular meetings. All directors attended at least 75% of the meetings of the Board and those committees on which each independent director served. Our policy with respect to attendance by directors at the annual meeting of shareholders is that attendance is required when the annual meeting of shareholders coincides with a Board of Directors meeting. The exception to this attendance requirement is when the two meetings are not consecutively scheduled. Thirteen of the then fourteen directors attended our 2007 annual meeting of the shareholders.

The independent members of the Board meet in an executive session following each regularly scheduled Board meeting. The independent directors also meet annually with Joan K. Shafran, the only other non-management director, in an executive session. Scott S. Cowen, as the Chairman of the Corporate Governance and Nominating Committee, serves as Presiding Director of all of these sessions.

Committees of the Board

The Board’s policy is to conduct its specific oversight tasks through committees, with the objective of freeing the Board as a whole to focus on strategic oversight and matters that by law or custom require the attention of the full Board. Our Board has established three standing committees, functioning in the following areas:

	•		audit and financial reporting;
	•		management compensation; and
	•		nominations, corporate governance and succession planning.

Each of the standing committees operates under a written charter approved by the Board following review and recommendation by the Corporate Governance and Nominating Committee. The committee charters for each of the standing committees can be viewed on our website at www.forestcity.net. Each Board committee is authorized to retain outside advisors.

Audit Committee: Our Audit Committee is composed of three nonemployee, independent directors: Michael P. Esposito, Jr., the chairman, Jerry V. Jarrett and Stan Ross. All of the Audit Committee members are financially literate in accordance with the requirements of the NYSE. The Board has determined that Michael P. Esposito, Jr. qualifies as an “audit committee financial expert” in accordance with the requirements of Section 407 of the Sarbanes-Oxley Act of 2002 and the SEC rules implementing that section. The Audit Committee’s purpose is to assist the Board in fulfilling its oversight responsibilities with respect to the following:

	•		the integrity of our financial statements, including our system of internal controls, accounting controls and disclosure controls;
	•		our compliance with legal, ethical and regulatory requirements including, but not limited to, the requirements of the Sarbanes-Oxley Act of 2002;
	•		the independent registered public accounting firm’s qualifications and independence;
	•		the performance of the independent registered public accounting firm and our internal audit function; and
	•		production of the Audit Committee’s report, made pursuant to the Securities Exchange Act of 1934, to be included in the proxy statement relating to our annual meeting of shareholders.

The Audit Committee meets with the independent registered public accounting firm on a quarterly basis and periodically as deemed necessary. In addition, the Audit Committee has created a policy for “Employee Complaint Procedures for Accounting and Auditing Matters,” which establishes procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

Our shareholders will have the opportunity to ratify the appointment of our independent registered public accounting firm at our 2008 annual meeting (see Ratification of Independent Registered Public Accounting Firm on pages 46-47 ). Although this ratification is not required by law, the Board believes that shareholders should have an opportunity to express their views on the subject.

The Audit Committee met eight times during the year ended January 31, 2008.

A copy of the Audit Committee Report is included in this proxy statement on page 36. The Audit Committee charter, as amended, is available on our website at www.forestcity.net.

Compensation Committee: Our Compensation Committee is composed of six nonemployee, independent directors: Jerry V. Jarrett, the chairman, Scott S. Cowen, Michael P. Esposito, Jr., Stan Ross, Louis Stokes and, effective April 1, 2008, Deborah L. Harmon. The Compensation Committee’s purpose is to assist the Board in carrying out its oversight responsibilities relating to compensation matters by:

	•		establishing and administering compensation of our executive officers and senior management;
	•		reviewing, at least annually, the goals, objectives and policies of our executive compensation plans;
	•		reviewing, at least annually, the succession plan for the Company and our senior executives;

	•		reviewing and approving the total compensation recommendations for the Chief Financial Officer and the three other most highly compensated individuals included in the Summary Compensation Table on page 29 as well as certain senior executive officers of important business units and subsidiaries in light of the executive compensation goals and objectives;
	•		administering our stock option or other equity incentive plans and approving all equity incentive awards for our executive officers; and
	•		in accordance with federal securities laws, reviewing the Compensation Discussion & Analysis prepared by our management and recommending the inclusion of such disclosure in the proxy statement relating to our annual meeting of shareholders.

The committee also annually evaluates the performance of our Chief Executive Officer based on objective and subjective criteria, including an assessment of business performance, accomplishment of long-term strategic objectives, and management development. For a description of the committee’s policies and procedures for the consideration and determination of executive compensation, see the Compensation Discussion & Analysis – Oversight of the Executive Compensation Program on pages 17-18.

The Compensation Committee met four times during the year ended January 31, 2008.

A copy of the Compensation Committee Report is included in this proxy statement on page 26. The Compensation Committee charter, as amended, is available on our website at www.forestcity.net.

Corporate Governance and Nominating Committee: Our Corporate Governance and Nominating Committee is composed of three nonemployee, independent directors: Scott S. Cowen, the chairman, Louis Stokes and Michael P. Esposito, Jr. The Corporate Governance and Nominating Committee’s purpose is to assist the Board in carrying out its oversight responsibilities relating to corporate governance matters, including the composition of the Board. As part of its responsibilities, the committee considers and makes recommendations to the full Board with respect to the following matters:

	•		identifying individuals qualified to become Board members and the director nominees for the next annual meeting of shareholders;
	•		director nominees for each committee;
	•		our organizational and governance structure, including developing and recommending to the Board the Corporate Governance Guidelines applicable to us;
	•		our Code of Legal and Ethical Conduct;
	•		the Board’s annual review of its performance;
	•		appropriate procedures for the succession planning for our senior executive officer positions;
	•		appropriate procedures to evaluate the performance of our Chief Executive Officer;
	•		evaluation of the Board, its committees and management;
	•		nonemployee Board member compensation;
	•		our strategic plan; and
	•		our charitable contributions.

The Corporate Governance and Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for director. The committee regularly reviews the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the committee considers various potential candidates for director. The Corporate Governance and Nominating Committee may consider candidates recommended by shareholders, as well as from other sources, such as current directors or officers, professional search firms or other appropriate sources. The committee may choose not to consider an unsolicited recommendation if no vacancy exists on the Board of Directors, and the Corporate Governance and Nominating Committee does not perceive a need to increase the size of the Board of Directors.

Third party consultants may be retained from time to time to identify potential candidates, but any such retention will be made directly by the Corporate Governance and Nominating Committee. If retained, third party consultants would be used primarily to identify potential candidates, conduct customary background and reference checks and recommend potential candidates to the committee in accordance with criteria furnished by the committee. On occasion, at the request of the chairperson of the committee, third party consultants may also conduct preliminary screening and interviews to assess candidate suitability in accordance with criteria furnished by the committee.

Our Corporate Governance Guidelines contain Board membership criteria that apply to the Corporate Governance and Nominating Committee’s recommended nominees for a position on our Board of Directors. Under these criteria, members of the Board shall demonstrate the qualities of integrity and high ethical standards, have the ability to communicate clearly and persuasively, express opinions, raise questions and make informed, independent judgments. A director shall possess knowledge, experience and skills in a minimum of one specialty area, such as: knowledge of the real estate industry (development, management, operations, marketing, competition, etc.); accounting and finance; corporate management; and international, legal or governmental expertise. Other qualifications include diversity in gender, ethnic background, geographic origin or personal and professional experience. The willingness and ability to work with other members of our Board of Directors in an open and constructive manner and the ability to devote sufficient time to prepare for and attend Board meetings are required. Service on other boards of public companies should be limited to no more than three or four, subject to the Board of Directors’ review.

To submit a recommendation of a director candidate to the Corporate Governance and Nominating Committee, a shareholder should submit the following information in writing, addressed to the Chairman of the Corporate Governance and Nominating Committee, at the address shown on page 13:

	•		the name, age, business address and residence of the person recommended as a director candidate;
	•		the principal occupation or employment of the person;
	•		any information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended;
	•		the written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;
	•		the name and record address of the nominating shareholder;
	•		the number of shares and class of common stock beneficially owned, for at least one year, by the nominating shareholder; and
	•		a statement disclosing whether such shareholder is acting with or on behalf of any other person and, if applicable, the identity of such person.

In order for a director candidate to be considered for nomination at our annual meeting of shareholders, the recommendation must be received by the Corporate Governance and Nominating Committee at least 90 calendar days prior to the date our proxy statement was released to shareholders in connection with the previous year’s annual meeting, advanced by one year.

The Corporate Governance and Nominating Committee met three times during the year ended January 31, 2008.

The Corporate Governance and Nominating Committee charter, as amended, is available on our website at www.forestcity.net.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee of the Board of Directors consists entirely of nonemployee, independent directors. No member of the Compensation Committee is a current or former officer or employee of ours or any of our subsidiaries, and none had interlocking relationships with any other entities of the type that would be required to be disclosed in this proxy statement.

Compensation Discussion & Analysis

Introduction

We are a real estate company principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. We were founded in 1920 and have been publicly-traded since 1960. Headquartered in Cleveland, Ohio, we have offices throughout the U.S and in London, England. We have grown into a diversified, nationally-recognized company with approximately $10 billion in assets, approximately 4,000 employees, annual revenues in excess of $1 billion, and an equity market capitalization as of January 31, 2008 of over $4 billion.

We attribute much of our success to our highly talented and experienced employees and our core values: integrity and openness in dealings with all stakeholders; creativity and an entrepreneurial spirit; teamwork; diversity and community involvement; sustainability; and long-term value creation through a high-performance culture. Our executive compensation program is intended to support these values, reinforce our culture and drive long-term growth and value creation. The following discussion summarizes our executive compensation program’s key objectives and primary components.

Each of these pay components is described in more detail later in this document.

Oversight of the Executive Compensation Program

The Compensation Committee (“Committee”) of the Board of Directors administers our executive compensation program. The current members of the Committee are Jerry V. Jarrett (Chairman), Scott S. Cowen, Michael P. Esposito, Jr., Stan Ross, Louis Stokes, and effective as of April 1, 2008, Deborah L. Harmon. All members of the Committee are outside directors as defined under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), are non-employee directors as defined in Rule 16b-3 under the Securities Exchange Act of 1934 and qualify as independent directors under the NYSE listing standards.

In reviewing and designing the various components of our executive compensation program, the Committee periodically draws upon the expertise of our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Executive Vice President (“EVP”), Human Resources who attend the Committee meetings. Our CEO provides advice and counsel to the Committee regarding alignment of performance measures under our annual Executive Bonus Plan, a short-term incentive plan (“STIP”) and our Executive Long-Term Incentive Plan (“LTIP”), may discuss the performance of key executives who report to him in the determination of the individual component of awards as well as any merit increases or pay adjustments, offers guidance and recommendations on succession and management planning activities and discusses the impact of design of our incentive programs (including equity awards) on our ability to attract, motivate and retain key personnel. Our CFO, who attends meetings as requested, provides an accounting and analysis of the financial results of performance measures under the STIP and LTIP. Our EVP, Human Resources provides information pertaining to

our compensation programs and in connection with succession planning reviews. The Committee meets in executive session when discussing the compensation of the CEO.

The Committee has the authority to retain, terminate, and approve fees for any compensation consultant used to assist in the evaluation of compensation for executive officers and other senior management employees. It may also obtain advice and assistance from internal or external legal, accounting, or other advisors.

During 2007 and early 2008, the Committee retained Mercer Human Resources Consulting (“Mercer”), an independent consulting firm, to conduct a comprehensive review of our executive compensation program that included the following activities:

	•		Reviewing our executive compensation strategy in support of our culture, key business objectives and best practices. Our executive compensation strategy was reaffirmed by the Committee at its December, 2007 meeting;
	•		Examining pay practices for critical positions specific to the real estate industry, including the design of a custom compensation survey tool;
	•		Conducting a pay analysis of executive officers and other management employees to compare pay competitiveness relative to the market, including a review of proxy pay information for the peer companies identified on page 19;
	•		Reviewing annual and long-term incentive compensation plans and recommending potential design modifications, which are discussed on pages 20-25 under “Components of the Executive Compensation Program”; and
	•		Meeting with management and the Committee to review findings and recommendations, as well as competitive trends and regulatory developments impacting executive compensation.

Our management is responsible for the preparation of this Compensation Discussion & Analysis.

Executive Compensation Core Principles

We use a set of core principles to guide the development and use of specific compensation elements, as outlined below:

	•		Our executive compensation program should reinforce key business objectives and our core values: Performance goals under the STIP and the LTIP are directly linked to our annual business plan and strategic plans, with an emphasis on long-term shareholder value creation.
	•		Pay should be aligned with performance: Our executive compensation program emphasizes variable “at risk” incentive pay tied to challenging performance goals, with no awards earned for results below a designated threshold level. Executives can earn significant incentive awards when outstanding Company, business unit and/or individual performance results are achieved and little or no awards when performance is below the target level. Performance is measured relative to the annual business plan and long-term strategic plan, including our internal measure of value creation at the individual property and overall portfolio level, which is defined as the change in net asset value plus or minus net cash flow (“Total Return”).
	•		A majority of pay for top executives should be performance contingent: Our executive compensation program promotes a pay for performance orientation, consistent with our high-performance culture, through the emphasis on incentive compensation. We provide incentive award opportunities, expressed as a percent of base salary, to our Named Executive Officers (as defined on page 29). The STIP promotes a combination of individual accountability and teamwork through the use of individual, business unit, and corporate performance goals as outlined in the Components of the Executive Compensation Program beginning on page 20. Awards under the STIP and the cash-based portion of the LTIP are based on corporate and business unit performance goals, and/or individual performance, and are only earned if performance targets are met. Stock option awards under the LTIP will only have value if our stock price appreciates between the time of grant and the time of exercise.
			The Committee has discretion to determine the incentive amounts paid under the STIP and the LTIP in the event of extraordinary or unusual circumstances that are separate and apart from normal economic cycles. For example, the Committee used positive discretion in determining the STIP awards made to executives for the 2001 performance period, to partially counter the severe short-term economic impact resulting from the catastrophic events associated with the September 11th tragedy.
	•		Incentive compensation should be tied to short-term and long-term performance: Our executive compensation program seeks to link incentive pay to performance over multiple time frames. Annual incentives under the STIP reward short-term performance in support of our annual business plan. Long-term incentives include the cash component of the LTIP that

reflects performance over a four-year period (consistent with our strategic planning cycle), and an equity component (currently stock options and restricted stock awards), which rewards long-term shareholder value creation.

	•		Long-term incentives are emphasized to align executive and shareholder interests: Our executive compensation program places greater emphasis on long-term incentives as compared with annual incentives, to focus senior management on long-term strategic goals and shareholder value creation. Performance measures for the cash component of the LTIP include Earnings Before Depreciation, Amortization and Deferred Taxes (“EBDT”) and Total Return achieved over a four-year period. We currently use a combination of equity-based and cash-based long-term award vehicles to minimize potential shareholder dilution resulting from the sole use of equity plans.
	•		Total compensation should be fair and competitive: We operate in a highly competitive industry and must ensure that our executive pay program allows us to attract and retain key management talent for continued growth and success. As noted, the Committee recently engaged Mercer to assess pay competitiveness for executive officers and other key management employees. Pay levels are also periodically reviewed to determine if they are internally equitable.
	•		Incentive compensation design should be simple and clearly understood by executive participants: We currently use the same two primary performance measures, EBDT and Total Return, under the STIP and the LTIP. We also provide annual notification to participants of performance goals and corresponding award opportunities for the incentive compensation plans.

Target Executive Officer Pay Levels and Relevant Employment Market

We use targeted pay levels to reinforce core principles and key objectives under our executive compensation program. Assuming at goal performance the targets relative to the market are as follows:

Total Annual Cash

Long-Term

Base Salary

Annual Incentives

Compensation

Incentives

Total Direct Compensation

(A)

(B)

(A + B)

(C)

(A + B + C)

Slightly above market medians

At market medians

Slightly above market medians

Above market medians

Above market medians

Base salaries and annual incentives are targeted competitively to attract talented and experienced employees. Long-term incentives are targeted above the market median, reinforcing our focus on challenging long-term strategic goals and shareholder value creation and to facilitate the attraction and retention of talented executives.

Due to the emphasis on performance-based incentive compensation, actual pay can be above or below targeted levels based on our actual versus planned performance results and level of stock price appreciation. For example, total direct compensation may be at or above the market 75th percentile when we achieve superior performance results, or well below the market median when goals are not met.

Relevant Employment Market for Executive Officers: The relevant employment market for executives is national and includes diversified real estate organizations, including publicly-traded and privately-held companies, with equity market capitalizations and/or total assets comparable to ours. Because we operate in 27 states, including several high cost of living locations such as New York and California, geographic pay differentials will be considered when establishing base salaries for executives, as applicable.

In assessing executive officer pay competitiveness, Mercer reviewed published compensation surveys for the real estate industry (reflecting data for both public and private companies), including: the CEL & Associates, Inc. Compensation Survey; the National Association of Real Estate Investment Trusts Compensation Survey; and Mercer’s Real Estate Compensation Survey, U.S. Benchmark Database and American Executive Remuneration Database. We also used a custom survey created by Mercer that included approximately 15 participating real estate companies. In addition, Mercer reviewed proxy-statement pay data for a designated group of publicly-traded industry peers referenced below.

We chose the companies in our peer group for their similarity in sales, asset size and/or market capitalization. Given that we have diversified real estate holdings, we also gave significant consideration to ensure the peer companies chosen represented a cross-section of the industry including land as well as retail, office and residential development and management companies. Peer group companies in the most recent review consisted of: AMB Property Corporation, Apartment Investment and Management Company, AvalonBay Communities, Inc., Boston Properties, Inc., Brookfield Properties Corporation, CBL & Associates Properties, Inc., Cousins Properties, Incorporated, Developers Diversified Realty Corporation, Duke Realty Corporation, Equity Residential, General Growth Properties, Inc., Kimco Realty Corporation, Liberty Property Trust, Macerich Company, Simon Property Group, Inc., SL Green Realty Corp., St. Joe Company, Taubman Centers, Inc., UDR, Inc. and Vornado Realty Trust.

We have removed several companies from the prior year’s peer group. These include Equity Office Properties Trust and Reckson Associates Realty Corporation (both acquired) as well as Highwoods Properties, Inc. and Equity One, Inc. who were replaced in the peer group by companies that we compete with more directly on a geographic basis.

Components of the Executive Compensation Program

The table below provides a high level overview of the four primary components within our executive compensation program, followed by a more detailed description for each component.

	Element			Key Objectives			Performance Linkage
	Base Salary			Provide fixed income stream based on level of responsibility, experience and individual performance			Partially linked (merit increases tied to performance)
	Annual Incentives			Align pay with achievement of short-term performance goals in support of annual business plan			Highly linked
	Long-Term Incentives			Align pay with achievement of longer-term strategic goals and shareholder value creation, enhance retention of key employees, facilitate stock ownership			Highly linked
	Benefits & Perquisites			Provide for employee health, welfare and retirement needs			Minimally or not linked

Base Salary: Base salary provides employees with a steady income stream reflective of their level of responsibility, experience, individual performance and contributions to our overall success. It serves as a means (in conjunction with other pay components) to attract highly talented executives, and also impacts annual and long-term incentive award opportunities that are expressed as a percentage of base salary.

Base salaries are targeted competitively and may be adjusted for executives within certain high cost of living locations (such as New York and California) to reflect geographic pay differentials. No geographic pay differentials are applied to targeted pay levels for employees within our Cleveland headquarters, including all Named Executive Officers. Actual salaries may be above or below the targeted level, based on each executive’s level of experience and performance.

In determining base salary levels for other executive officers, the Committee considers:

	•		Pay practices of comparable real estate organizations, as compiled by Mercer;
	•		CEO recommendations for our other executive officers; and
	•		Their assessment of each executive’s contributions towards our success.

As discussed earlier, we set pay levels for our senior executives using external market data and also take into account internal equity considerations. Only one of our Named Executive Officers received a base salary increase during fiscal year 2007. Brian J. Ratner’s salary increased by 3.5% at the beginning of fiscal year 2007 to reflect competitive market rates for similar positions. Consistent with their employment agreements, base salary amounts for other Named Executive Officers were as follows: Charles A. Ratner, $500,000; James A. Ratner, $450,000; Ronald A. Ratner, $450,000. Thomas G. Smith’s salary, which is not determined by an employment agreement, remained at $425,000.

Annual Incentives: Named Executive Officers and other members of senior management are eligible to participate in the STIP. The plan’s primary objective is to motivate executives to achieve specified business objectives over the short-term that lead to long-term value creation. Actual awards earned (if any) can be considerably above or below target levels based on our actual versus planned performance.

Each year, our CEO in consultation with the CFO, recommends performance goals to the Committee for each measure under the STIP, taking into consideration the annual business plan, past performance, and current market conditions. In reviewing proposed performance goals, the Committee also takes into consideration:

	•		Their consistency and alignment with our annual business plan and long-term strategic plans;
	•		How challenging each goal may be to achieve; and
	•		The historical performance of the company in setting the goal.

The Committee annually approves the performance goals and award opportunities for the upcoming plan year. Any earned awards are subsequently paid in cash upon final determination and approval by the Committee. Performance measures under the STIP include EBDT at the corporate level and Total Return above a specified threshold at the corporate and business unit levels. We establish corporate EBDT and business unit and corporate Total Return goals each year within the annual business plan. We view these measures as key drivers of near-term value creation that plan participants can understand and impact. We tie a portion of the STIP opportunity to the attainment of individual business objectives that are established at the beginning of each fiscal year.

Given our past performance in meeting challenging goals, the Committee approved the use of higher performance thresholds for purposes of the Corporate EBDT and Total Return measures under the STIP. For the 2007 year, no payment was to be made for the EBDT component of the STIP award unless performance exceeded the prior year’s actual (threshold). The Target for the Total Return measure was established taking recent historical performance and anticipated market conditions into consideration.

The Committee believes that disclosure of actual targets used under the STIP could adversely affect us since, among other things, certain of such measures and projections are not publicly disclosed and could place us at a competitive disadvantage relative to other real estate companies.

Consistent with our core compensation principles, Named Executive Officers have a target STIP award opportunity expressed as a percentage of base salary. Most of our Named Executive Officers had a 2007 STIP target opportunity of 70% of base pay. Actual payouts could range between 0% and 140% of base salary, depending on the level of performance. Brian J. Ratner’s STIP target opportunity for the 2007 performance period was 50% of base pay with an actual payout opportunity that could range from between 0% and 100% of base salary, commensurate with the nature of his duties and responsibilities relative to the other Named Executive Officers.

All STIP participants have a portion of their award opportunity tied to corporate financial goals to promote teamwork and collaboration among departments and business units. Corporate financial goals are equally weighted between EBDT and Total Return. The performance mix under the STIP varies based on job function and responsibility level as outlined in the following table:

			Percent of STIP Award based on:
	Named Executive						Corporate Total			Business Unit Total			Individual
	Officer			Corporate EBDT			Return			Return			Performance
	Charles A. Ratner			45%			45%			0%			10%
	James A. Ratner			22.5%			22.5%			40%			15%
	Ronald A. Ratner			22.5%			22.5%			40%			15%
	Thomas G. Smith			40%			40%			0%			20%
	Brian J. Ratner			12.5%			12.5%			25%			50%

Named Executive Officers serving as business unit CEOs have 40% of their incentive opportunity tied to their respective business unit’s Total Return results, a slightly lower weighting as compared with the corporate financial component due to their significant involvement in overall corporate planning and accountability for our consolidated results. Certain Named Executive Officers, such as Brian J. Ratner, who lead an operating region of a division, have a greater portion of their overall award determined by individual performance than the other Named Executive Officers.

Individual goals for our Named Executive Officers, which reinforce individual accountability, pertain to such matters as the achievement of specific corporate or business unit objectives, participation in the strategic planning process, and the development of key talent within the organization. In evaluating the CEO’s performance, the Committee considered predetermined objectives including progress towards management development and succession planning, and financial results compared to budgeted targets.

The actual amounts paid under the STIP for fiscal year 2007 reflect higher corporate and business unit Total Return relative to annual targets. However, consistent with our philosophy of pay for performance the threshold for the Corporate EBDT measure was not met for 2007, resulting in no amount being paid for this portion of the award. The individual performance rating for each Named Executive Officer also affected the award amount.

In terms of corporate Total Return, the maximum award under the STIP for this component was earned. During the past year significant value was created due to several transactions, which in turn impacted this portion of the award. Since we operate in a transactional business environment it is possible for a significant one-time event, such as the sale of a property, to impact this measure on an annual basis. However, these same transactions can and do impact the baseline when setting targets for subsequent years. It is for these reasons that we believe performance as measured by long-term value creation should be emphasized more heavily when determining the compensation package for our Named Executive Officers. Our LTIP allows for performance to be evaluated within the context of sustained long-term value creation using a cumulative total return figure over a four-year time period.

The total STIP payments earned by eligible Named Executive Officers as a percent of base salary along with the target, threshold and maximum award percentages were as follows:

				STIP Award Percentage
																Actual 2007 STIP Dollar
	Named Executive Officer			Target			Threshold			Maximum			Actual			Award Amount
	Charles A. Ratner			70%			55%			140%			74%			$367,500
	James A. Ratner			70%			56%			140%			90%			$404,649
	Ronald A. Ratner			70%			56%			140%			103%			$464,625
	Thomas G. Smith			70%			49%			140%			77%			$327,250
	Brian J. Ratner			50%			23%			100%			52%			$166,258

The actual awards earned under the STIP varied based on business unit and/or individual performance as well as due to performance mix. The actual STIP award earned by James A. Ratner and Ronald A. Ratner as a percentage of base salary was higher than target due to a smaller percentage of their award being determined by corporate performance. By contrast, actual Total Return for their respective business units was substantially above target resulting in an above target award.

For Charles A. Ratner and Thomas G. Smith, actual STIP awards paid were slightly above target despite the fact that no amount was earned for the portion of the award attributable to corporate EBDT. Maximum performance under the Total Return portion for the award coupled with above target individual performance, resulted in a slightly above target award. Brian J. Ratner’s overall award was also essentially at target. Due in large part to not meeting our corporate EBDT performance target for the past year, the total STIP awards for the 2007 performance period for Charles A. Ratner, James A. Ratner, Ronald A. Ratner and Thomas G. Smith were lower than those paid for the 2006 performance period.

Awards payable to the CEO are determined by the Committee. The Committee reviewed and approved the achievement of performance results and approved the awards under the STIP for the 2007 performance period.

Based on a recent review of competitive market conditions, the Committee accepted a recommendation by Mercer to increase the target STIP levels for eligible Named Executive Officers from 70% to 80% of base salary (with a payout range of between 0% and 160%) effective with the 2008 performance period. In addition, the Committee concurred with the recommendation to increase Brian J. Ratner’s target STIP opportunity from 50% to 60% of base salary (with a payout range of between 0% and 120%).

Long-Term Incentives: Our business strategy is to create sustained long-term value for our shareholders and customers by continually enhancing the value of our existing portfolio and by identifying new development and acquisition opportunities within targeted high growth markets. Our primary goal is to build long-term asset value by maximizing the spread between return on capital employed and our cost of capital. We believe sustained growth in long-term asset value should translate into superior total shareholder returns over time.

Our long-term incentives align pay with long-term strategic goals and shareholder value creation. They also enhance our retention of executives and other key employees, and facilitate stock ownership. Our long-term incentives consist primarily of two components: cash awards provided through the LTIP, and equity provided primarily through the use of stock options.

Our Named Executive Officers and certain other senior management members currently receive long-term incentives. Under the LTIP, stock options are granted annually while cash awards are provided once every four years to coincide with our four-year strategic planning cycle. This promotes a balanced focus on Total Return and financial performance objectives under the strategic plan in support of long-term value creation.

Long-term incentives reinforce our primary objective of long-term value creation. In determining award levels for Named Executive Officers and senior management, consideration is given to competitive market practice, employee responsibility level, and internal equity. The current annual target award for most Named Executive Officers under the LTIP is equal to 120% of base salary with half in the form of stock options and half in cash. Actual awards earned (if any) can be considerably above or below target levels based on our actual versus planned performance relative to strategic goals and stock price appreciation. Brian J. Ratner’s target annual award under the LTIP is currently 90% of base salary with half in the form of stock and half in cash, commensurate with his duties and responsibilities.

Named Executive Officers participate in the cash-based portion of the LTIP with actual award levels ranging from between 0% to 175% of targeted levels based on performance results over a related four-year period. A new LTIP performance cycle generally begins every four years. For the 2004 through 2007 strategic plan cycle, we established award levels and the performance mix as follows:

				Target Annual Award Equivalent									Percent of Cash LTIP Award based on:
										Cash LTIP
										Award
										Percentage in the			Corporate			Corporate			Business Unit
				Total LTIP						form of Cash			EBDT over			Total Return			Total Return
	Named Executive			Award			Percentage in the			(paid once every			four-year			over four-year			over four-year
	Officer			Percentage			form of Equity			four years)			period			period			period
	Charles A. Ratner			120%			60%			60%			50%			50%			0%
	James A. Ratner			120%			60%			60%			50%			25%			25%
	Ronald A. Ratner			120%			60%			60%			50%			25%			25%
	Thomas G. Smith			120%			60%			60%			50%			50%			0%
	Brian J. Ratner			90%			45%			45%			50%			25%			25%

Cash-based LTIP awards are contingent on the attainment of corporate EBDT and business unit and corporate Total Return goals over the four-year performance period. Performance goals are derived from our strategic plan and are measured over four-year cumulative periods. Executives are eligible to earn an incentive that accrues toward a single payment at the end of each four-year period, provided that certain cumulative performance objectives are met. For example, the annual cash-based LTIP accrual for the CEO is targeted at 60% of his annual base salary or 240% of his average base salary over a four-year cycle.

The actual performance targets used in determining awards under the cash-based LTIP were based on goals contained in our four-year strategic plan. As indicated throughout this document, our compensation program places a greater emphasis on longer-term performance; as such, management and the Committee set highly challenging goals as measured by EBDT and our internal measure of value creation, Total Return.

The Committee believes that disclosure of actual targets used under the cash-based LTIP could adversely affect us since, among other things, certain of such measures and projections are not publicly disclosed and could place us at a competitive disadvantage relative to other real estate companies.

Awards payable to the CEO are determined by the Committee, which reviews and approves awards payable to other participants. Currently, any four-year performance period awards are paid in cash, in order to minimize shareholder dilution from equity plans. The Committee certified the achievement of performance results and approved the awards under the cash-based LTIP for the four-year period ending 2007.

The cumulative total target, threshold and maximum award opportunities under the cash-based LTIP are shown below along with the actual awards earned for the 2004 – 2007 performance period. The corresponding dollar amounts for threshold, target and maximum awards are shown under the Grants of Plan-Based Awards table on page 31.

				Cumulative Cash LTIP Award expressed as a Percentage of Average Base Salary over the 2004 – 2007 Performance Period
																Cumulative Actual
	Named Executive			Cumulative			Cumulative			Cumulative			Cumulative			2004 – 2007 Dollar
	Officer			Target			Threshold			Maximum			Actual			Award Amount
	Charles A. Ratner			240%			138%			420%			347%			$1,693,575
	James A. Ratner			240%			138%			420%			347%			$1,519,875
	Ronald A. Ratner			240%			138%			420%			347%			$1,519,875
	Thomas G. Smith			240%			138%			420%			347%			$1,433,025
	Brian J. Ratner			180%			104%			315%			261%			$780,785

The actual cash-based LTIP award was higher than target for the four-year performance period, reflecting above average aggregate EBDT performance for the cumulative period and maximum Total Return performance on both a corporate and business unit basis for the period. Overall performance for the 2004 – 2006 period was well above target for each of the measures used in the cash-based LTIP award calculation. For 2007 however, performance in EBDT was below target while Total Return was above target on both a

corporate and business unit level. As indicated earlier in this document, this below target EBDT performance for 2007 impacted our Named Executive Officers’ STIP awards.

The results for the STIP and the cash-based LTIP differ for the period ended January 31, 2008. Given our focus on long-term value creation, the cash LTIP paid an award that was considerably higher than target relative to the STIP award for the past year, and was a product of four-year cumulative EBDT and Total Return performance in excess of plan.

In terms of equity awards, we typically grant stock options under the LTIP following the release of full year earnings for the prior fiscal year. Stock options have an exercise price equal to the closing market price of our Class A Common Stock on the date of grant. The Committee has not granted options, and does not intend to grant options, with an exercise price less than the closing market price of our Class A Common Stock on the grant date, repriced options or issued options with “reload” provisions.

Stock option awards may be granted to Named Executive Officers as well as other senior executive officers of significant subsidiaries as determined by the Committee, based on an evaluation of the executives’ duties and overall performance including current and potential contributions to our success. Options will only have value if our stock price appreciates from the time of grant to the time of exercise. In order to enhance employee retention, stock options typically vest over a four-year period following the date of grant as follows:

	•		25% after two years;
	•		50% after three years; and
	•		100% after four years.

We use the Black-Scholes option pricing model to determine grant levels required to deliver target award values (which are targeted at 60% of base salary annually for most Named Executive Officers with the exception of Brian J. Ratner whose annual target is 45%). Stock options are exercisable for up to 10 years from the date of grant to allow executives to maximize pre-tax gains and focus them on long-term shareholder value creation. During fiscal year 2007, we granted an aggregate total of 130,600 stock options to Named Executive Officers, allocated among them as shown in the Grants of Plan-Based Awards Table included in this proxy statement. For stock option grants made between 2005 and 2007, we used a share-based approach that resulted in the same number of shares being granted to Named Executive Officers for each of the past three years.

We may also periodically grant service-based restricted stock to promote retention of certain key executives and provide them with an enhanced ownership stake. Restricted stock typically vests over four years from the time of grant. During the first quarter of 2007, Thomas G. Smith was granted 2,500 shares of restricted stock that typically vest 25% after two years, 50% after three years, and 100% after four years from the date of grant. However, under the terms of our Stock Plan, the vesting of these shares automatically accelerated upon Mr. Smith’s retirement effective April 1, 2008.

We believe that our incentive plans have been successful in focusing executives on long-term value creation, as evidenced by our 10 year annualized total shareholder return of approximately 17% through January 31, 2008.

Based on a recent review of competitive market conditions using a number of compensation survey resources previously discussed in this document and an analysis of peer group proxy data, the Committee approved a recommendation by Mercer to increase the annual equivalent target LTIP levels for select eligible Named Executive Officers effective with the 2008 – 2011 performance cycle. Given their substantial ownership interests, the target LTIP levels for Charles A. Ratner, James A. Ratner and Ronald A. Ratner remain the same, while the annualized LTIP target for the CFO position and certain other senior executive positions increases to 180%. Brian J. Ratner’s annualized equivalent LTIP target increases to 120%. Also included in the recommendations approved by the Committee, (and pending approval of an amended and restated Forest City Enterprises, Inc. 1994 Stock Plan (“Stock Plan”) at the June shareholder’s meeting), was a recommendation to begin using Performance Share grants for certain Named Executive Officers, corresponding to the 2008 – 2011 performance cycle.

Effective April 1, 2008, Thomas G. Smith retired and Robert G. O’Brien was named Chief Financial Officer and Executive Vice President of Forest City Enterprises, Inc. Robert G. O’Brien’s base salary will be determined using appropriate market benchmark data and, on a going forward basis, he will be eligible for STIP and LTIP awards commensurate to those of other Named Executive Officers in similar level positions.

Benefits and Other Perquisites: Consistent with our pay for performance philosophy, Named Executive Officers do not receive a large number of perquisites or supplemental benefits. Named Executive Officers as well as other members of senior management receive customary benefits such as group term life insurance. Likewise, these individuals are eligible to participate in our qualified 401(k) retirement plan, which provides for an employer matching contribution of up to $3,500 per year. We do not maintain a qualified defined benefit pension plan. In order to supplement retirement benefits and enhance retention of key executives, Named Executive Officers also participate in an unfunded nonqualified supplemental retirement plan, administered by the Committee, which

provides for discretionary annual accruals that only begin to vest after 10 years of service, with full vesting after 15 years of service. For fiscal 2007 and as shown in the Nonqualified Deferred Compensation Table on page 33, total contributions on behalf of the Named Executive Officers amounted to $85,000. Effective with the 2008 fiscal year, management intends that no new entrants will be permitted into this plan. Additionally, annual “contributions” made on behalf of Named Executive Officers and other senior executives will cease after the most recent contribution that occurred in early 2008. Our management’s decision to discontinue contributions to the plan and to not add new participants was based in part on the desire to focus these dollars in the future on plans and programs that will benefit a greater number of our associates.

We also provide our Named Executive Officers with an executive medical benefit and the premium cost associated with a long-term care policy. Each named executive is also offered a company-provided car for personal use. The value of these items is included in the All Other Compensation column of the Summary Compensation Table on page 29.

Additionally, a death benefit is provided to all Named Executive Officers except for Brian J. Ratner (and Thomas G. Smith following his recent retirement). The benefit is equal to the annual salary of each executive at the time of death and is paid to his designated beneficiaries in the form of salary continuation for a period of five years in the event the executive dies while in our employment. Further information on these benefits is provided in the Potential Payments upon Termination section of this proxy statement.

Additional Executive Compensation Policies

Stock Ownership Guidelines: We encourage executive stock ownership but do not currently have formal guidelines in place due to the significant ownership levels of the executive officer team.

Employment Agreements: As disclosed in the Summary Compensation Table included elsewhere in this proxy statement, we have employment agreements with Charles A. Ratner, James A. Ratner and Ronald A. Ratner that provide for a minimum base salary and death benefit agreements, and are renewable for one-year periods. Thomas G. Smith had an agreement with us regarding his death benefit that was effective during his active employment. Given the significant ownership interests of our Named Executive Officers, we do not provide for severance or change of control benefits as part of these agreements. We do not have an employment agreement with Brian J. Ratner.

Tax and Accounting Implications

Deductibility of Executive Compensation: Section 162(m) limits the amount of compensation provided to certain executive officers that publicly-traded companies can deduct to $1 million per “covered employee” unless it qualifies as “performance-based” (as defined under Section 162(m)). In order to qualify as “performance based”, compensation must be based solely on pre-established objective goals under a shareholder approved plan, with no positive discretion permitted when determining award payouts. To the extent any of the Named Executive Officers have received non-qualifying compensation in excess of the $1 million limit it was not deducted. The Committee’s policy with respect to Section 162(m) is to consider tax deductibility while also maintaining the flexibility to structure the executive compensation program to support Company and shareholder interests, even if some compensation is not fully tax deductible.

The Committee and full Board recently approved several measures that are included in this proxy statement for shareholder consideration. These include amendments to the STIP and LTIP that would allow payments under these plans to Named Executive Officers to qualify as performance-based under Section 162(m). Additionally, a proposal to amend the Stock Plan to permit the use of performance shares and to allow these shares to qualify as performance-based is also included. All of the aforementioned proposed changes are pending approval of our shareholders at the June 19, 2008 meeting.

Nonqualified Deferred Compensation: On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law, changing the tax rules applicable to nonqualified deferred compensation arrangements. We are operating in good faith compliance with the statutory provisions that were effective January 1, 2005. The final regulations were issued April 17, 2007 by the Treasury Department and the IRS along with a directive to bring documents into compliance with the final nonqualified deferred compensation regulations under Section 409A of the Internal Revenue Code by December 31, 2008. The final regulations are applicable for taxable years beginning on or after January 1, 2008, and our nonqualified deferred compensation plan meets the requirements set forth in the final regulations.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion & Analysis be included in this proxy statement.

Jerry V. Jarrett (Chairman)		Scott S. Cowen		Michael P. Esposito, Jr.
Stan Ross		Louis Stokes		Deborah L. Harmon

The foregoing Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that we specifically incorporate the information by reference and shall not otherwise be deemed filed under such acts.

Potential Payments upon Termination

The following discussion outlines the payments that would be provided to Named Executive Officers in the event of termination, retirement or death as of January 31, 2008. Given the significant ownership interests of our Common Stock by our Named Executive Officers as described in the Compensation Discussion & Analysis, we do not provide for severance or change of control benefits.

Salary Continuation

Named Executive Officers currently do not receive salary continuation upon termination or retirement. A salary continuation death benefit is discussed under the heading “Death Benefits” on page 27.

Cash Incentives

In the event of termination, unless otherwise determined by the Compensation Committee, the Named Executive Officer must complete the performance period to which the STIP and the LTIP pertain to be entitled to a payout under these Plans.

Equity Awards

Upon termination, Named Executive Officers would forfeit all vested stock options not exercised prior to termination as well as any remaining unvested options or restricted shares. The Compensation Committee retains the ability to accelerate the vesting of any terminating Named Executive Officer’s stock options and/or restricted stock depending on the circumstances surrounding the termination.

Upon retirement, Named Executive Officers would vest in all options granted as part of the fiscal years 2005 and 2007 option grants and would be able to exercise these options for the remaining period of their ten-year life. Vested outstanding options provided prior to the 2005 grant would be exercisable for a period of up to 90 days following the date of retirement. Unvested options granted prior to 2005 would be forfeited. The vesting of restricted stock granted to a Named Executive Officer in 2006 and 2007 would be accelerated upon retirement. Had each of the Named Executive Officers retired as of January 31, 2008, the intrinsic value associated with accelerated vesting of any stock options that were in the money, and restricted stock would have been as follows: Charles A. Ratner, $243,000; James A. Ratner, $153,090; Ronald A. Ratner, $153,090; Thomas G. Smith, $372,265, and Brian J. Ratner, $91,125.

In the event of death, the estate of the Named Executive Officer would be able to exercise any vested options for the remaining period of their ten-year life. Unvested options would be forfeited. Restricted stock issued during 2006 and 2007 would also be immediately vested upon death.

The number of options and unvested restricted shares outstanding for each Named Executive Officer as of January 31, 2008 is shown in the Outstanding Equity Awards at Fiscal Year-End table on page 32.

Deferred Compensation

In the event of voluntary termination, retirement or death, each of the Named Executive Officers, or their beneficiaries, would be eligible to receive their nonqualified deferred compensation balances which include their elective deferrals plus any aggregate earnings, as well as the balances associated with their unfunded nonqualified supplemental retirement plan. The total nonqualified deferred compensation balances consisting of elective deferrals and supplemental retirement plan benefits, are provided in column (f) of the Nonqualified Deferred Compensation table on page 33.

In all circumstances, payments of elective deferrals will be paid in accordance with each Named Executive Officer’s election. Supplemental retirement plan benefits will be paid over a period of ten years for voluntary terminations or retirement and in a single lump-sum in the event of death. In case of an involuntary termination, all or a portion of the supplemental retirement benefit may be forfeited at the discretion of the Committee. The supplemental retirement plan benefit portion of the total nonqualified deferred compensation balances as of January 31, 2008 were:

	Named Executive Officer			Supplemental Retirement Plan Balance as of January 31, 2008
	Charles A. Ratner			$448,288
	James A. Ratner			$351,259
	Ronald A. Ratner			$350,296
	Thomas G. Smith			$2,180,773
	Brian J. Ratner			$126,779

Death Benefits

Under the terms of each Named Executive Officer’s employment agreement (or a separate arrangement that previously existed in the case of Thomas G. Smith), their beneficiaries would receive an annual benefit equal to the Named Executive Officer’s base salary for a period of five years following the date of death while employed by Forest City. As stated earlier, Brian J. Ratner does not have a separate death benefit agreement.

Other Benefits and Perquisites

Payment of premiums associated with executive medical and long-term care insurance would cease upon termination, retirement or death. However, the executive and/or his surviving dependents could elect to continue coverage under each of these plans at their own expense. Continuation of executive medical coverage under COBRA would be available for a period of up to 18 months.

Retirement of Thomas G. Smith

Thomas G. Smith retired as our Executive Vice President, CFO and Secretary on April 1, 2008. Before Thomas G. Smith retired, we discussed the possibility of providing him with retirement compensation in addition to the amounts we and our retirement plans were already obligated to pay him in connection with his retirement. At its March 2008 meeting, the Compensation Committee discussed the possibility of providing Thomas G. Smith with additional retirement compensation. The Compensation Committee considered Thomas G. Smith’s total contributions to us over his 22 years of service, including the relationships he has built with our credit line banks resulting in substantial growth of our credit line facility and the implementation of our comprehensive insurance and risk management program. The Compensation Committee also reviewed and considered the following:

	•		the value of Thomas G. Smith’s contributions to us as Chief Financial Officer and Secretary relative to his compensation while he held those offices;
	•		our successes and achievements during Thomas G. Smith’s tenure; and
	•		our Chief Executive Officer’s recommendation that, in his opinion, it was appropriate to provide additional retirement compensation to Thomas G. Smith.

In light of these considerations, the Compensation Committee determined that it was appropriate to provide a retirement package under which we will provide the following payments and benefits to Thomas G. Smith or for his benefit:

	•		Retirement Payment - We agreed to make a retirement payment to Thomas G. Smith in the amount of $1,000,000.
	•		Equity Grant - We made a special grant of 15,000 shares of restricted stock to Thomas G. Smith on March 25, 2008 with a grant date fair value of $574,350.
	•		Automobile Buyout - We purchased for Thomas G. Smith’s benefit the business automobile we currently lease for him. The buyout cost of this vehicle was $51,126 exclusive of tax.
	•		Executive Medical benefit premium payments - We provided an additional payment in the amount of $86,700 approximating the present value of premium costs associated with continuing Thomas G. Smith and Mrs. Smith’s Executive Medical coverage for a period of 18 months, on a grossed up basis.

On April 1, 2008, we entered into an agreement with Thomas G. Smith setting forth the terms of his retirement package. Our obligation to make these payments and provide these benefits was contingent on Thomas G. Smith’s actual retirement, and Thomas G. Smith also had to sign a general release of all claims he may have or have had against us. The Compensation Committee determined the actual amount and form of the retirement payment based on its subjective consideration of each of the factors listed above, but the Compensation Committee did not give any one factor any particular weighting or importance. The cash portion of the retirement payment will be paid by April 30, 2008.

(continued on next page)

EXECUTIVE COMPENSATION TABLES

The following tables present compensation information for our Principal Executive Officer (PEO), Principal Financial Officer (PFO) and the three other most highly compensated executive officers (collectively the “Named Executive Officers”) for fiscal year 2007.

Summary Compensation Table

																																		Change in
																																		Pension Value
																																		and Nonqualified
																																		Deferred
																			Option					Non-Equity Incentive Plan										Compensation					All Other
	Name and Principal								Salary					Stock Awards					Awards					Compensation										Earnings					Compensation					Total
	Position			Year					($)					($)(1)					($)(2)					($)(3)										($)(4)					($)(5)					($)
																							(g)
	(a)			(b)					(c)					(e)					(f)					Annual					Long-Term					(h)					(i)					(j)
	Charles A. Ratner,				2007				$	500,000				$	-				$	891,034				$	367,500				$	1,693,575				$	3,329				$	77,981				$	3,533,419
	President and Chief				2006				$	500,000				$	-				$	692,009				$	482,090				$	-				$	2,309				$	71,621				$	1,748,029
	Executive Officer (PEO)
	Thomas G. Smith,				2007				$	425,000				$	163,375				$	499,949				$	327,250				$	1,433,025				$	14,611				$	106,146				$	2,969,356
	Executive Vice President,				2006				$	424,639				$	139,110				$	481,238				$	436,968				$	-				$	9,913				$	112,984				$	1,604,852
	Chief Financial Officer and Secretary (PFO)
	James A. Ratner,				2007				$	450,000				$	-				$	291,260				$	404,649				$	1,519,875				$	2,775				$	76,456				$	2,745,015
	Executive Vice President				2006				$	450,000				$	-				$	209,785				$	524,065				$	-				$	1,913				$	68,745				$	1,254,508
	Ronald A. Ratner,				2007				$	450,000				$	-				$	258,246				$	464,625				$	1,519,875				$	6,282				$	72,686				$	2,771,714
	Executive Vice President				2006				$	450,000				$	-				$	209,785				$	524,065				$	-				$	3,824				$	65,133				$	1,252,807
	Brian J. Ratner,				2007				$	320,950				$	-				$	153,746				$	166,258				$	780,785				$	-				$	68,904				$	1,490,643
	Executive Vice President (6)