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March 24, 2009
Pascrell asks Treasury to force Barclays to bail on Ratner arena naming-rights deal
Yesterday, NJ Congressional Representative Bill Pascrell sent a letter to Treasury Secretary Timothy Geithner, asking that the government step in to force the cancellation of Barclays $400 million naming-rights deal for Bruce Ratner's new Nets arena.
There are four main distinctions between the Barclays and CitiGroup-Mets deals, both valued at $20 million per year over 20 years:
- the Nets arena at Atlantic Yards hasn't even broken ground,
- the Barclays deal has an "out" clause,
- unlike CitiGroup, Barclays was an indirect recipient of federal bailout funds, channeled through AIG,
- the Barclays deal was reaffirmed AFTER AIG received its initial infusion of federal bailout money.
Here are links to and highlights from the coverage:
The NY Observer, Jersey Pol Takes Swipe at Bruce Ratner's Arena Deal
...New Jersey electeds have generally refrained from publicly disparaging the plans, at least in the past couple years. But now, with the more than $4 billion project on death watch due to the economy and a lengthy legal battle, there seems to be a change in tune.
Today, U.S. Rep. Bill Pascrell publicly released a letter he wrote to Treasury Secretary Tim Geithner, requesting that the Obama administration act to block Barclays bank from leasing naming rights for the arena—a move that, if realized, would be a major blow to the project.
The NY Times, Congressman Wants Barclays-Nets Deal Scrapped
Pascrell said in a telephone interview: “The bailout money was never anticipated to be used to put your name on a sports arena. The circus is over. The taxpayer has to be protected. I’m more outraged about this than the A.I.G. bonuses.”
Barclays and the Nets signed their 20-year deal in early 2007, two months after Citigroup signed its $400 million deal with the Mets to put its name on Citi Field. Citigroup has received $45 billion in Troubled Asset Relief Program funds. Barclays got its bite out of TARP from A.I.G., but has not taken bailout money in Britain.
In the Barclays’ situation in Brooklyn, Pascrell said, “A shovel hasn’t been put into the ground, the agreement has an escape clause and no money has been exchanged.” He added, “The secretary has to appeal to these people.” Pascrell said he would consider legislation “as a last resort” if Geithner cannot persuade Barclays to drop out.
The Bergen Record, Pascrell seeks cancellation of Brooklyn arena naming rights
“I believe that any further payments of taxpayer money… be conditioned on the cancellation of any stadium or arena naming-rights agreements that may be in place,” wrote Pascrell. “Federal money was made available to banks and companies like AIG in order to stabilize the financial system and free up credit markets, not for high-priced marketing opportunities.”
NY Newsday, NJ lawmaker seeks cancellation of arena name deal
In a letter Monday, Pascrell, a Democrat from Paterson, told Geithner he believes any further payments of taxpayer money to financial firms should be contingent on cancellation of any sports naming rights deals.
Atlantic Yards Report, On Barclays/AIG, NJ Congressman vaults story into media; Yormark spins regional benefits, affordable housing
Norman Oder traces the growth of this story and counters Nets CEO Brett Yormark's argument that Atlantic Yards represents "benefits for the entire region":
A new arena would compete with the already-built Prudential Center for a finite number of events. The city's rationale for subsidies is that the arena would poach tax revenues from New Jersey. It's surprising that more New Jersey officials haven't glommed on to Pascrell's media gravy train.
DDDB.net, Yormark Says Arena Will Provide Housing
Develop Don't Destroy Brooklyn notes that, in his official statement to the press, Nets CEO Brett Yormark is trying to sell the Barclays naming-rights deal as a regional jobs and affordable-housing program.
Nets Daily, Congressman Asks for End to Barclays Naming Rights
Here's one opposing view.
NJ.com, Whose money is it?
So why punish Barclays? Barclays not only didn't receive any corporate welfare here, but they didn't need a bailout from their own government. When they needed additional funds, they got them the old fashioned way - they convinced investors to invest in them.
NoLandGrab: Yeah, they got funds the old-fashioned way — they struck a deal with investors in Qatar and Abu Dhabi who could end up owning almost a third of the bank, in order to avoid at all costs having to answer to UK bank regulators.
Posted by lumi at March 24, 2009 6:00 AM