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June 25, 2009
Nets arena gets land bailout, still needs bond backing
New Jersey Nets owner Bruce Ratner got his sweetheart land deal for a Brooklyn arena yesterday, as the Metropolitan Transportation Authority board approved a plan that would let him defer payments and spend $100 million less on replacing a rail yard on the proposed arena site. In a last-minute twist, arena opponents Develop Don't Destroy tried placing their own competing bid for the land, saying they had just as good a shot at getting financing for their Unity development plan as Ratner did for his arena, but the MTA refused to consider the offer.
And about that arena financing: The New York Times' Charles Bagli reports that it could present Ratner's "most daunting challenge," as he needs to secure $586 million in bonds by the year's end or lose the bonds' tax-exempt status, which would likely raise borrowing costs enough to kill the arena outright. The bonds would be backed by arena revenues like suite and advertising sales, and those aren't exactly selling briskly right now: Sports marketer Matt Yonan tells Bagli, "Finding sponsors at the level they need for the long haul is a difficult proposition."
For much more on this, including warnings from elected officials that it was illegal for the MTA to accept the revised deal without an independent appraisal, and video of the proceedings, see Atlantic Yards Report's long, long report on the day's events.