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June 23, 2009
Revised Nets deal includes reduced payments, subway naming rights
As threatened, New Jersey Nets owner Bruce Ratner and the New York Metropolitan Transportation Authority proposed a revised payment plan yesterday for the land under Ratner's planned Brooklyn arena, one that will allow him to defer some payments until the year 2031. My quick back-of-the-Excel calculation estimates that this would save Ratner between $12 million and $24 million off his $100 million land payment in present value, though it'd be less of a deal for him if you assume the economy is going to continue to tank and interest rates will stay low.
A bigger break for the developer — and one not mentioned by many news outlets, including the New York Times — is that Ratner would also spend $100 million less on replacing the MTA's train yard than he'd previously promised.
Finally, Ratner is offering to pay $200,000 a year to rename the Atlantic Avenue subway station next to his arena after Barclays, the bank that has promised to buy naming rights to the arena. This would presumably mean naming the station "Atlantic Avenue–Barclays Center," along the lines of the "Willets Point/Citi Field" that the Mets balked at paying for earlier this year.
The last-second proposal — the MTA board first heard details at their meeting yesterday, and are expected to vote tomorrow — didn't sit well with some board members, with one, Doreen Frasca, objecting: "It's one month shy of four years since the board accepted the Forest City Ratner proposal, and this committee and this board is being given less than 48 hours to understand the complexities and vote intelligently... I think that's pretty outrageous."