February 17, 2011

Ratner: I thought Nets arena was dead in '08

Hey, remember this blast from the past?

With the economy in freefall a wee pickle and bank credit nearly impossible to get, people are starting to consider what this will mean for the sports-stadium biz. On the hot seat today: the New Jersey Nets' planned Atlantic Yards arena project in Brooklyn, for which Goldman Sachs had promised that $950 million in financing would be in place by today. Yesterday, asked by the Newark Star-Ledger about the status of the Nets financing, the former investment bank issued a terse "no comment."

It turns out the Star-Ledger and I weren't the only ones wondering about this at the time: Nets part-owner Bruce Ratner tells the Daily News today that there was a time he doubted the arena would ever get built: "Yeah, in October of '08. Like a lot of people, I didn't know if we'd all be on breadlines. Goldman Sachs and Barclays Bank were always our underwriters. Greg Carey at Goldman, always a very optimistic guy, told me in October and November there was no financing available at all."

Of course, as I also wrote back then, "It's things like this [the collapsing real estate market] that are more likely to have a lasting impact on stadium and arena projects: Banks will start lending money again eventually, but the lousy economy is likely to last for years." The banks eventually started lending again, Ratner found a guy who was more interested in owning a basketball team than making money on a real-estate deal, and as of today the arena is taking shape, with about half the main vertical support girders in place. (More or less—I last walked past it on Monday.) Still, it's a reminder of how narrow the margin of victory (or defeat) can be in sports construction deals.