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September 23, 2009
From Russia, with Rubles
Here's a sampling of stories about the latest chapter in the long, strange trip otherwise known as Atlantic Yards.
AP via Crain's NY Business, Nets, Russia's richest man agree to deal
Could the New Jersey Nets become the Nyets?
The basketball team once known as the New Jersey Americans is a step closer to being owned by Russia's richest man, Mikhail Prokhorov, who on Wednesday said he has a deal to buy 80 percent of the NBA team and nearly half of a project to build a new arena in Brooklyn.
The proposed blockbuster deal would give the Nets' current principal owner, Bruce Ratner, the needed cash to move forward with the centerpiece of his Atlantic Yards development, which includes plans for retail and residential projects.
It would make Mr. Prokhorov, a Russian billionaire and former amateur basketball player, the NBA's first non-North American owner.
...Brooklyn's famed Russian enclave of Brighton Beach is only a few miles from the proposed arena, but for many Russian emigrants Mr. Prokhorov symbolizes everything wrong in their homeland — a smooth operator who made a fortune when Russia sold off its state industrial treasures for a song.
NY Daily News, Russian billionaire Mikhail Prokhorov to become majority owner of Nets
The NBA board of governors still has to approve the deal but it seems like commissioner David Stern is all for it.
"We are looking forward to the Nets' move to a state-of-the-art facility in Brooklyn, with its rich sports heritage," Stern said in the release. "Interest in basketball and the NBA is growing rapidly on a global basis and we are especially encouraged by Mr. Prokhorov's commitment to the Nets and the opportunity it presents to continue the growth of basketball in Russia."
Deadspin, Russian Dude Will Build Arena, Buy Nets, Annex New Jersey
Russian basketboligarch Mikhail Prokhorov has gone from maybe chipping in a few dollars to build a new arena for the Nets to offering to take over the whole dang team—and maybe the entire NBA while he's at it.
The whore-loving nickel salesman initially laughed off the rumors that he was being courted to invest in the soon-to-be Brooklyn Nets, but then admitted that he had indeed been approached to become a "shareholder" of the team. He did have a counter-proposal, however. It was: "Why don't you just give me all the shares and get out of my way?"
The Wall Street Journal, Nets, Atlantic Yards to Get Russian Infusion
Forest City Enterprises Inc. and Nets Sports & Entertainment tentatively agreed to sell a stake in its long-delayed Brooklyn, N.Y., entertainment and residential complex as well as 80% of the Nets basketball team to Onexim Group, a private investment fund headed by Russian billionaire Mikhail Prokhorov.
The agreement comes almost six years after New York Mayor Michael Bloomberg, Brooklyn Borough President Marty Markowitz and developer Bruce Ratner struck a deal for a $4.3 billion project to remake downtown Brooklyn with Atlantic Yards, a 22-acre residential and commercial real-estate project, and the $950 million Barclays Center arena that would bring the New Jersey Nets to the borough.
PolitickerNJ.com, Pascrell questions sale of Nets to Russian billionaire
New Jersey Congressman Bill Pascrell asks the questions that his New York counterparts have so far failed to raise.
U.S. Rep. Bill Pascrell (D-Paterson) wants the National Basketball Association to review a deal for a controversial Russian billionaire to purchase the New Jersey Nets.
..."Mr. Prokhorov's background raises questions about his fitness to be the owner of a high-profile NBA franchise," Pascrell wrote to NBA Commissioner David Stern. "Both Mr. Prokhorov's business and personal history have come under intense scrutiny in his home country and abroad."
..."According to documents released by the Empire State Development Corporation, taxpayers are providing over $2 billion dollars in financing and direct grants towards the Atlantic Yards project," Pascrell said. "This represents a significant investment and risk by the taxpaying public. Should this sale go through, a large stake in the project, as well as a majority stake in the Nets, would be controlled by a foreign corporation, a first for the NBA."
Pascrell says that taxpayers would be "directly subsidizing the profits and business risks of this foreign corporation, whose investment will be reportedly smaller then the public's, instead of benefiting the taxpaying public.
"Especially during these tough economic times, this is, at best, a questionable use of taxpayer money and it is a question that should be explored," said Pascrell.
Forbes.com, From Russia To The NBA, With Money
Beleaguered New Jersey Nets owner Bruce Ratner, whose efforts to build a state-of-the-art arena and housing and commercial complex in Brooklyn have been stymied time and again by politics and economic challenges, has pulled off a drastic play to get his new playground: giving up his team.
..."I've never seen a deal like this," says Don Erickson, who runs Erickson Partners, a Dallas-based sports valuation specialist. The slumping commercial real estate market has most banks demanding that developers take higher equity stakes in projects--often 30% or more--along with a personal guarantee, according to Erickson. After losing a reported $70 million over the past two years, Forest City Ratner wasn't prepared to make that type of commitment.
"It put Ratner in a difficult position; he wasn't going to get construction financing," Erickson says.
Atlantic Yards Report, Could 80% of the Nets be sold for $200 million? Either Ratner's a sucker or (more likely) much of the deal is obscured
I'm reading the news coverage of the deal announced today, and pretty much everyone is taking it at face value that Russian billionaire Mikhail Prokhorov can invest $200 million and gain an 80% share of the Nets and 45% of the Atlantic Yards arena.
Ratner and his ownership group bought the Nets for $300 million in 2004, as I noted earlier today. If 80% of the team goes for $200 million, that's a $40 million loss.
Ratner would look like even more of a sucker if Prokhorov could simply sweep up nearly half of the arena with that investment.
But Ratner's no dummy. The "certain contingent funding commitments" mentioned in the press release surely hold the key to the deal.
NoLandGrab: Sure, Ratner's no dummy, but the fact that he's making this deal with Prokhorov makes it pretty clear that Ratner had no choice but to make this deal with Prokhorov.
Bloomberg News, Prokhorov to Buy Nets, Share of Arena From Ratner
The $200 million deal comes three months before the deadline for Ratner to break ground on the arena or lose financing through tax-exempt bonds issued by a New York state agency. Barclays Plc also had the right to pull out of its 20- year, $400 million naming-rights deal for the arena if construction hasn’t started by that date.
The Star-Ledger, Russian billionaire agrees to deal to become NJ Nets majority owner
Remarkably, a Forest City release emphasized the new viability of the Atlantic Yards project, and didn’t mention Prokhorov and the Onexim Group wresting control of the team until the third paragraph.
...
The ownership transfer, Ratner spokesman Joe DePlasco reiterated in an e-mail, “is contingent on the move.”
So if the Atlantic Yard project is forestalled or abolished, Forest City retains controlling partnership.
HoopsWorld, NBA PM: Nets Sale Details Revealed
New Jersey Nets owner Bruce Ratner and Russian businessman Mikhail Prokhorov have agreed to a deal in which Ratner's ownership stake will be sold to Prokhorov.
...
It also ensures the new Nets stadium will be done and also ensures the Nets will continue their planned path in moving from New Jersey to Brooklyn.
NLG: "Ensures the new Nets stadium will be done?" Not exactly.
Rocky Sullivan's Pub Quiz via Only the Blog Knows Brooklyn, Greetings from Scott Turner: The Weirdness Comes Out To Play
It continues Bruce Ratner's running theme: BROOKLYN CAN'T GET IT DONE. The sad fact is, Bruce Ratner is skint. He doesn't have the dough for Atlantic Yards, can't get more public funding, the banks aren't lending to him, and his only choice is a Russian oligarch -- a class of business practitioners with reputations in the company of robber barons and Sham-wow pitch men.
Himself from Cleveland and the Upper East Side...architects from Los Angeles and Indiana...landscape designers from Philly...construction management firms also from Philly...corporate sponsors from all over the country...and now a majority owner of the Nets from Russia.
NY1 News, Russian Tycoon Strikes Deal To Buy Most Of N.J. Nets
Brownstoner, Nets Will Have New Owner; FCR Will Have New AY Partner
Russia Today, Russian buys controlling stake in New Jersey Nets
The Brooklyn Paper, It’s official! Russian billionaire buys Nets and invests in Atlantic Yards
Brooklyn The Borough, Atlantic Yards Sugar Daddy Is Also A Russian Oligarch
The Cleveland Leader, Ratners Deal With Russian Oligarch
The Deal, Nets get a new owner after all
Posted by eric at September 23, 2009 9:39 PM