Could Newark sell arena to recoup costs?

Newark city officials are debating selling the Prudential Center, home of the Devils (and, for the next two seasons, the Nets), to help close the city’s budget gap. Two city councillors say a sale could bring in between $80 million and $200 million, plus put the building back on the property tax rolls, while Mayor Cory Booker says a sale is “not feasible” until the Devils’ ongoing rent dispute is resolved.

While in the abstract a sale sounds like a great idea, you have to wonder why, if the arena currently isn’t making any money (thanks in part to that Devils lease), any private investor would want to pay $80 million to buy it and agree to pay property taxes to boot. That may be a sad statement about a building that cost more than $500 million to build just three years ago, but there it is.

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8 comments on “Could Newark sell arena to recoup costs?

  1. “…why, if the arena currently isn’t making any money (thanks in part to that Devils lease), any private investor would want to pay $80 million to buy it and agree to pay property taxes to boot.”

    Maybe because the Barclays Center in Brooklyn is such a colossally bad (and exorbitantly expensive) idea that Newark officials feel they can make a play at Mikhail Prokhorov to gauge his interest in buying a ‘piece of the Rock’ (pun intended) for $200 million and purchasing a portion of a facility that is already completed instead of throwing bad money after a $1 billion money pit in the heart of BK. He saves money at the end of the day, while keeping his team in the NY metro area.

  2. Judging from the number of big-ass cranes at the Barclays Center site when I walked by yesterday, I don’t think anything short of a major natural disaster can stop that at this point.

    Also, Freddy’s Bar has been demolished, if anyone was wondering. As has most of the rest of that block, though Dan Goldstein’s old condo building is still there.

  3. I won’t be convinced about Barclays until it is up and operational. Call me a conspiracy theorist if you wish, but for all the cranes and hubbub, how much vertical construction is actually occurring? There’s a reason it has taken seven years to get anything off the ground, and still no completed arena to show for it – and it has less to do with NIMBYs than most folks may want to believe.

  4. Okay, Mike T: according to your point of view, if it’s not the NIMBYs, then what is it holding up the construction?

    I wouldn’t doubt that Booker may well be attempting to appeal to Prokhorov and effectively undermine the Brooklyn project. Is there something more to it than that in your opinion?

  5. MikeT, you sound exactly like these two guys over at the Nets Daily blog. The Nets are moving to Brooklyn, face facts. The Barclays Center has a deal in place with Golden Boy Promotions for 10 boxing matches a year, they’ll get NCAA basketball tournaments and will become a premiere venue in the United States. Nothing is holding up that arena, they fought tooth and nail to get that arena built.

  6. Neil;

    If I remember correctly, the Newark was on the hook for around $270M of the construction cost of the arena. Even if this “rent dispute” is resolved in the city’s favour (which is not only not certain, I would say it is unlikely, given the free pass pro sports franchises tend to get from legislators), they still will not be close to profitable on operations. How do you sell a building that is locked into a long term money losing lease (except to your non-paying tenant, of course, presumably with the proviso that no property taxes or ‘water fees’ will ever be paid)?

    For a council that voted to commit public money to this boondoggle, suggesting that it be sold to recoup about 25% of it’s construction cost is ludicrous. Before thinking about making such an utterance, councillors should be putting the final touches on their letter of resignation.

    As ‘performance self-evaluation’ goes, this one is very revealing…

  7. brushing the semantics aside, it’s another badly managed city that gave away a sweetheart lease on a dog of a building in a marginal location. and now they want the franchise to bail them out, what a surprise…
    places like newark will never get out of the hole that they are in until there’s a total change at city hall and that’ll never happen there.

  8. Stop your complaining the nets are moving to brooklyn. But for all you in new jersey you will most likely get another pro nba team in the future.(kings or grizzlies). I also can see the islanders moving to brooklyn or queens.

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