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December 10, 2009

A minimum of 10 community events vs. a maximum of 10 events; how FCR frames the same arena pledge differently for community groups and bond buyers

Atlantic Yards Report

Norman Oder catches Bruce Ratner talking out of both sides of his mouth, as the Atlantic Yards developer and NJ Nets owner signs off on one promise to supporters in the Community Benefits Agreement (CBA) and but seeks to reassure potential bondholders otherwise.

When it comes to making the Atlantic Yards arena available to community groups, Forest City Ratner has promised those groups at least ten events a year, but it has told potential bond buyers that ten times is a maximum.

Also, in a seeming contradiction, it has told community groups the arena would be made available at a discount, but it told bond buyers it wouldn't.

The Empire State Development Corporation's (ESDC) Final Environmental Impact Statement (FEIS) for the Atlantic Yards project states in Chapter 1, Project Description:

The arena is expected to host approximately 225 events per year. Of these, a minimum of 10 events would be made available for use by community groups at a reasonable cost (generally the cost of operation) with any net proceeds to the sponsor from these events to be donated to not-for-profit organizations.

That's pretty much the same as what's in the Community Benefits Agreement (CBA), which states:

(1) Events. The Arena will be available to Community groups for at least ten (10) events per year, at a reasonable rate, with net proceeds from such events to be used to support non-profit community organizations.

However, there's something else in the Barclays Center Project Preliminary Official Statement prepared by Goldman Sachs, (G-4, or p. 298 of the PDF) :

Tenant shall make the Arena available to ESDC or its designee for use as a venue for civic, cultural, social or other events as requested by ESDC, not to exceed ten (10) events in any lease year, which access shall be on the same terms, including cost, as the Arena is generally made available to other Persons for use.

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NoLandGrab: So to fulfill his obligation to his CBA supporters and to stay on track with bondholders, Bruce Ratner would have to rent out the arena for exactly 10 events at the "reasonable rate" of exactly what everyone else has to pay.

You'd think that CBA signatories would be peeved, but since they're funded by Ratner, they seem to have little recourse other than continue their unwaivering support to the end.

Posted by lumi at December 10, 2009 6:25 AM