Bankers arranging the financing are comparing the Nets arena to Madison Square Garden, New York City's best-known arena, touting its location and accessibility to public transportation as big crowd draws. But the bond sale is coming at a time when consumers and corporations are cutting back on sports spending and competition in the arena business in the metropolitan New York region is as fierce as it has ever been. Goldman Sachs Group and Barclays bankers have spent weeks in discussions with three credit-rating services and bond insurer Assured Guaranty Ltd.
The developers are hoping for an investment-grade credit rating on the bonds and to issue them at annual interest rates of roughly 6. Whether the debt will be insured - which could be key to selling the bonds - remains uncertain, as debates continue about the arena's revenue-earning potential. Revenue from the arena - which includes ticket sales, advertising and naming rights - will pay off the debt.
The past year has seen top sports teams including the New York Yankees, New York Giants and New York Jets struggle to sell premium seats and luxury suites in new stadiums. Still, supporters of the project say the state-of-the-art arena's location at a transportation hub in the country's biggest market virtually guarantees success. When the Atlantic Yards development was envisioned several years ago, selling bonds to finance the arena's construction was expected to be a cinch.
Earlier this year, additional tax-exempt bonds tied to the ballparks were issued at yields ranging from 3. Last month, the Nets' principal owner, Bruce Ratner, announced a deal to sell 80 percent of the team to Russian billionaire Mikhail Prokhorov, who also plans to buy a 45 percent stake in the Atlantic Yards project.
The deal is contingent on approval and financing for the arena. The new lawsuit comes as the state's highest court dismissed two other challenge to the project that threatened to stop it in its tracks. The New York Court of Appeals dismissed the challenge to the use of eminent domain to acquire land for the team's new arena and a larger multi-use development. It also rejected a claim that the taking of land for the project would primarily benefit a private developer rather than the general public.
Three other lawsuits challenging the project remain. The revenues to pay the bonds would come from the sale of luxury suites, premium seats, advertising and sponsorships, as well as ticket revenues and concessions. Both rating agencies highlighted the city's commitment to the project, but noted the weak financial condition of the Nets, and the uncertainty, given the recession, of predicting revenues from premium seating and sponsorships.
Ratner recently signed a deal to sell an 80 percent stake in the Nets to the Russian billionaire Mikhail D. Prokhorov, who would cover the team's operating expenses for the next several years. One of the rating agencies, Moody's, said the remaining lawsuits were not a concern. Ratner expects construction of the 18,seat arena will take about 28 months, enabling the Nets to move from East Rutherford, N.
It also claims the public development corporation has ceded too much control to the private developer. In June, the state agreed to revise the project plan, which was initially approved in , to allow Forest City to pay the money over two decades instead of in one lump sum. That followed revelations by Forest City that various aspects of the project would be delayed.
The deal reportedly would see the Nets move from the Izod Center to the Prudential Center while the Prudential Center would agree not to bid for entertainment shows sought by the Izod Center. Both facilities, which are only a few miles apart, have been bidding against each for the shows, making it difficult for either to make money.
To make the deal work, the owners would create a new venture, Jersey Presents, which would schedule events and divide revenues. The money would be divided between the venues under a formula still being devised. They would also pay a significantly lower per-game rental fee, and earn a share of suite revenue they generate at the Prudential Center. The Devils and the Nets would also sell ticket packages together. New Jersey officials hope the move to Newark's newer arena could help keep the Nets from moving to Brooklyn in A performance clause in the proposed deal would require that the team spend minimum amounts on player salaries and marketing as long as they remain at the Prudential Center.
The Nets say they are focused now on arranging financing for their Brooklyn arena. That must be in place by the end of the month or they will lose state money needed for construction.
Team officials say they will consider a move to Newark after that deal is done. The agreement is also expected to please businesses around the Izod Center which have been working hard to make sure the venue doesn't close.
As a rule, those who attend entertainment shows at the Izod Center tend to utilize area restaurants and other businesses more than sports fans. One other constituency may be needed to pull the plan off: the New Jersey legislature.
If the new fee is added by the venues, the money becomes taxable. However, if it is ordered by the legislature, it becomes tax-free. Governor-elect Christopher Christie is opposed to the surcharge, so to avoid his veto, the legislature must act before he takes office Jan. Legislators have already started arguing about the fee with some calling it a bailout for the Prudential Center and others saying it's a state subsidy for Newark.
Our partners see the value in the Barclays Center and continue to affirm their investment. The outline also includes unspecified revenues from seat licenses and club seat licenses. It also notes that the New York Islanders could be a potential tenant in the building, although the building is not being built for hockey and relocation of the Islanders would likely be subject to approval by the New York Rangers which control the Brooklyn territory.
But that success was quickly followed by another problem - a deal to move the Nets temporarily from Izod Arena in the Meadowlands to the NHL Devils' arena in Newark fall apart. The agreement would have allowed the Nets to break their lease at the Izod Center, opening the door to a temporary move by the struggling NBA team to the more modern Prudential Center, which hopes to become a showcase for sporting events in New Jersey.
The Nets would share the building with the Devils hockey team, until the team's planned move to Brooklyn by The arrangement would also seen entertainment shows moved to the Izod Center to end the competition between the two venues. The deal was aimed at benefitting all sides, generating additional funding for both the sports authority, the operators of the Prudential Center and the city of Newark, while offering the Nets an opportunity to sell more tickets and share in additional luxury suite revenues.
The deal collapsed when legislators, who must approve legislation needed for the plan to work, decided it was unfair to rush the bills through without input from the state's incoming governor, Chris Christie. Christie has said he is opposed to new taxes and a ticket tax is part of the plan needed to allow the changes to take place. He will be sworn in Jan. Team officials say they will hope they can still make the plan work.
The developer and his partners will raise the rest of the money for the 18,seat arena privately. Ratner, the chief executive of Forest City Ratner, is expected to complete the master closing for Atlantic Yards with various city and state agencies next week.
At the same time, Ratner plans to close on the sale of an 80 percent stake in the Nets to the Russian billionaire Mikhail D. Prokhorov, pending approval by the NBA. They hope to open the arena by June The housing at Atlantic Yards may take longer, given the flagging real estate market, although Ratner has promised to start one residential tower after the arena is under way.
He must also contend with several lawsuits challenging the project. The bonds are backed in part by the sale of premium seats, luxury boxes, advertising and sponsorships at the arena, which will be called Barclays Center.
The bank agreed to extend the deal. The concept was envisioned by the Rev. Herbert Daughtry, the fiery pastor of the House of the Lord Pentecostal Church who has played a behind-the-scenes role to acquire various "community benefits" from developer Bruce Ratner. This meditation room appears to be one of them. The owner of a condominium won a price that was nearly six times the original offer.
The owner agreed to vacate the unit by May 7 to help meet a construction timetable. The effort also produced deals with the other two remaining holdouts - a self-storage facility and a real estate developer.
Those tenants, whose land is elsewhere on the Atlantic yard footprint, agreed to leave by June Those deals set the stage for Russian billionaire Mikhail Prokhorov to buy the team.
He wanted all of the land issues settled before he took over. Nets spokesman Barry Baum told the news service the team filed paperwork with the National Basketball Association. If accepted, the change would become official before the season, when the Nets plan to move to Brooklyn's new Barclays Center.
And we left ourselves some time between July and Nov. Ratner added that he and other arena executives "hadn't really approached" backup plans if construction lags.
But the Nets' deal to play two seasons in the Prudential Center in Newark, starting this fall, contains an option to play in Newark in if necessary. Utility relocation at the site is 75 percent complete, Ratner said, with that work and the demolition of two buildings on the site scheduled to be finished by the end of the year.
The arena will "go vertical" - with steel going up at the site - in the first quarter of , Ratner said. Ratner also showed off the temporary plaza plan outside the arena, which includes a train station at Atlantic and Flatbush avenues with a roof that is to be planted with flowering, seasonal plants.
Ratner told reporters he hoped to begin work on the second of 17 buildings that would be part of the Atlantic Yards project, "starting in eight or 10 months. October 14, Copyright MediaVentures Stolichnaya signed a five-year accord to become the official vodka of the Barclays Center, which will be the home of the Russian-owned New Jersey Nets from , according to Bloomberg News.
Financial terms weren't disclosed. Supreme Court Judge Marcy Friedman agreed in the page ruling, saying that the state agency must offer an explanation why a new environmental review - which could substantially stall the project - is not needed, even though the previous year deadline is no longer in effect. The Record said Steel is scheduled to go up at the arena site starting next month, and three residential buildings - with construction starts tentatively set for , , and - would follow.
The revised development timeline was finalized on Dec. Friedman then ruled in favor of the project in March, setting the stage for the arena groundbreaking and for infrastructure work at the site near downtown Brooklyn.
Friedman added that if ESDC is to assert a year build-out is still a reasonable assumption, and that a revised year timeline's effects on "neighborhood character, air quality, noise, and traffic" would be unnecessary, "then it must expressly make such findings and provide a detailed, reasoned basis for the findings.
Risks to investors cited in the SEC filings include the potential of rising construction costs and financing rates, loss of arena sponsorships and inability to meet government-approved construction deadlines, the newspaper said.
Forest City reported "record" earnings the past year ending Jan. The Post said the filings also reveal the Prokhorov deal in May was a greater financial windfall for Ratner than what was announced publicly. July 14, Copyright MediaVentures The Atlantic Yards development, not including a new arena for the Nets now under construction, must undergo further environmental review to examine the impact of delays on the project, State Supreme Court Justice Marcy Friedman ruled.
The New York Times said the decision was critical of the Empire State Development Corporation, the state agency that oversees the development, but it will not stop the developer, Forest City Ratner, from working at the site.
Justice Friedman did order a Supplemental Environmental Impact Statement to determine the effects of the project's extended timeline. Judge Friedman also called for further examination as to whether or not to approve the Modified General Project Plan for Phase II, which consists of most of the construction.
Officials declined to disclose the deal's terms. As part of the Coke deal, Nets fans could be treated to special Brooklyn-themed flavored beverages, along with the company's trademark soft drinks and juices.
Coke will also partner with the Nets in providing community health-and-wellness services. August 25, Copyright MediaVentures Soon after the defeat of Nassau County's referendum to build the Islanders a new arena, Brooklyn arose as an attractive option for the team's relocation. Newsday says that possibility is now looking more realistic. The spokesperson declined to discuss the nature of the meeting, but an additional league source defined it as "very general and conceptual in nature," the newspaper said.
The decision upheld a lower-court ruling by Supreme Court Judge Marcy Friedman last July that requires the state to conduct a new environmental review of the second phase of the project, which consists of 11 towers that Ratner plans to build east of Sixth Avenue.
But the ruling has no bearing on the first phase of the project, which includes the arena and proposed residential towers. Skip to content. Barclays Center. Long Island 10 hours ago. Storm Team 4 Nov Back to Article.
Close Menu. To learn more or opt-out, read our Cookie Policy. Fourteen years ago, then Nets CEO Brett Yormark pulled off a coup in getting Barclays, the big British bank, to sponsor the new arena not yet under construction at the corner of Flatbush and Atlantic. Barclays, then planning on opening retail banks in the U. With new ownership, new management and a new marketing team, is a change of name at the nine-year-old possibility?
Not likely, according to materials unearthed by NetsDaily on Tuesday. Brian Lewis and Josh Kosman of the Post reported Sunday that the Nets parent company, BSE Global, is mounting an aggressive campaign to wring more dollars out of the arena and team sponsorship agreements. Abbamondi has been pushing to find ways to add or enhance revenue sources.
The parent company of the arena and the Nets, then owned by Mikhail Prokhorov, went through a refunding process for Barclays Center bonds back in The naming rights agreement was referenced in those materials, which are publicly available.
A source familiar with the agreement tells NetsDaily that it remains in place.
0コメント