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December 15, 2009
Bonds for Nets’ Arena in Brooklyn Sell Briskly
City Room
by Charles V. Bagli
Developments in the now-six-year-old Atlantic Yards saga rarely fail to astound us.
Almost six years after he bought the New Jersey Nets with plans to move the team to Brooklyn, the developer Bruce C. Ratner quickly sold more than $500 million in tax-exempt bonds on Tuesday morning for a new basketball arena in Brooklyn.
Indeed, the demand for the bonds from institutional investors far outstripped what was available and belied the project’s tortured history, years of delays and court challenges. The $1 billion basketball arena at the intersection of Flatbush and Atlantic Avenues is the centerpiece for the 22-acre Atlantic Yards development, which is to include more than 6,000 apartments.
“There was a strong appetite for the bonds,” said Jay Abrams, a bond analyst at FMS Bonds. “The market was comfortable with the ratings the deal received and the security that was pledged.”
The developer’s underwriters — Goldman Sachs and Barclays Capital — handled the sale of the tax-exempt bonds, which totaled $511 million. The developer will sell more than $100 million in taxable bonds in the coming weeks for the 18,282-seat arena.
Next week, Mr. Ratner, chief executive of Forest City Ratner, is expected to complete the “master closing” for Atlantic Yards with city and state agencies and to begin condemnation for private property he does not already own or control. Mr. Ratner is also selling an 80 percent stake in the Nets to the Russian billionaire Mikhail D. Prokhorov. The two partners will invest $293.4 million in the arena and use a $131 million subsidy from the Bloomberg administration.
They hope to open the new arena by June 2012. The new housing at Atlantic Yards may take longer, given the flagging real estate market, although Mr. Ratner has promised to start one of the residential towers after the arena is under way. He must also contend with several remaining lawsuits challenging the project.
Posted by eric at December 15, 2009 3:05 PM