September 20, 2009
Does Ratner have a Plan B for the Brooklyn Nets? Not beyond more government concessions, I'll bet
Atlantic Yards Report
What happens if the proposed Nets arena plan falls through? Norman Oder looks at the possibilities.
... think we've already seen Plan B. Plan B means renegotiating the deal when possible. Forest City Ratner has long been said to have cash flow difficulties. After Thursday's approval by the ESDC to amend the city and state funding agreements, the developer will get the final $40 million of $200 million pledged, without having to fulfill certain milestones.
Moreover, the developer apparently will get some portion of the additional $105 million the city has set aside for infrastructure; rather than the city spending it, the money would go directly to FCR.
There's no reason or incentive for Forest City Ratner to move the Nets to another site in Brooklyn. The Atlantic Yards side is "a great piece of real estate," to quote CEO Chuck Ratner of parent Forest City Enterprises and, crucially, it sits across the street from Forest City Ratner's Atlantic Center and Atlantic Terminal malls.
Parking lots at Forest City Ratner's MetroTech would help with arena overflow. That's all called synergy. And he can't build Atlantic Yards without the arena.
The Coney Island site that Borough President Marty Markowitz once promoted is now destined for residential towers and green space, according to the recent rezoning.
There have been reports about putting a roof on the U.S. Open Stadium in Queens, and a new arena has been suggested as part of a megadevelopment over the yet-undeveloped Sunnyside Yards in Queens.
But Brooklyn's the place with the huge financial upside. If the AY arena falls through, the easiest place for the team to go is Newark, because there's already an arena there and the New York market can surely support two basketball teams. But Ratner wouldn't be the owner, unless--and this is a big if--it comes as part of a package for urban development in Newark.
That's unlikely, given that Brooklyn-based Forest City Ratner has no experience in New Jersey, and developers like to know the local political byways.
Beyond Newark, the most likely destinations would be cities with a new arena but no team, like Kansas City or a former NBA city with an arena that needs renovation, like Seattle. That would mean a sale of the team.
Posted by steve at September 20, 2009 11:03 AM