Field of Schemes
sports stadium news and analysis

  

This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.

March 04, 2005

Nets, NYC sign MOU

It was overdue by months, but it's finally here: New Jersey Nets owner Bruce Ratner has agreed on a Memorandum of Understanding with the city and state of New York to build a new arena and housing/commercial development atop the Long Island Rail Road yards in Brooklyn.

An MOU, for those unfamiliar, is just a non-binding document spelling out the details of a deal - it's no guarantee that the Nets deal will ultimately happen. It does, however, finally provide a figure for the public costs of the proposed project: according to the New York Times, "the city and the state have agreed to provide about $100 million each for site preparation, new streets and utilities and environmental cleanup."

That would be a lot less than what was in Andrew Zimbalist's report for Ratner last year, which projected a total of $424 million in public construction and land-prep costs. If the Times story is accurate (I'm still trying to track down an actual copy of the MOU to read it myself), then it seems inconceivable that Ratner could pay for a $450 million arena, plus pay the MTA fair market value for the rail yards, and still make back his investment. The arena, then, would be a loss leader for him to get the rights to develop the land - which is potentially not a bad deal for the city, except that it puts the lie to claims that no one else would develop the site if not for Ratner.

Which brings up Shaya Boymelgreen, a developer who already is targeting some of the existing buildings sought by Ratner for demolition, to convert them into a hotel and office space. "I hope the city government realizes that this is not a desolate area," Henry Weinstein, who owns one of the buildings, told the Daily News. Since Ratner would likely need to use state eminent-domain powers to get the land for his project, and the Supreme Court is currently debating the legality of this, it's likely nothing will happen with the Nets arena plans until summer at the earliest.

In New York Jets stadium news, meanwhile, city controller William Thompson has said he plans to investigate the city's use of developer PILOT payments that Mayor Mike Bloomberg wants to use to pay the city's $300 million share of construction costs. Whether Thompson plans to audit current PILOT uses or proposed ones is a bit unclear - I'll update this item if I can dig up any more information.

Latest News Items

CONTACT US FOR AD RATES