March 18, 2009
Forest City borrows $20 million from NBA lenders to counter Nets' losses
Atlantic Yards Report
Norman Oder translates yesterday's Forest City press release.
Despite suffering serious losses, more than $30 million a year, the owners of the New Jersey Nets have adjusted a key loan that could help the team limp toward a transition to a new Brooklyn arena.
The Forest City Enterprises press release issued yesterday sounds like gobbledygook....
...[A]s far as I can tell, it means that the owners of the Nets had already borrowed $65 million and not only extended that loan, but lowered the principal on it by taking out a separate $20 million loan.
Reasons to hang on
And, among the 12 teams in the 30-team league that were interested in a loan, the Nets borrowed the maximum. Remember, Forbes reported in December that the Nets were among only seven teams that declined in value, and the Nets experienced the largest retreat, of 13%.
A new arena paid for by naming rights (and maybe just taxpayers), with many luxury suites, would raise the value of the team enormously. That's why, as Forest City Enterprises struggles financially, selling off viable properties, Atlantic Yards likely will be held until the bitter end.
Posted by eric at March 18, 2009 11:01 AM