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December 16, 2009
More Bondage
The Architect's Newspaper Blog, The Final Slam Dunk?
There may be a few hoops left to jump through before Bruce Ratner can begin construction of his SHoP- and Ellerbe Becket-designed arena for the Brooklyn, né New Jersey, Nets, such as completing a partial sale of the team to a Russian oligarch, prevailing in some outstanding lawsuits, and going ahead with eminent domain against the area’s remaining holdouts. But the developer appears to have cleared the final major hurdle standing in his way with the successful sale of $511 billion in tax-exempt bonds today. Yes, those hoops may still present challenges, but none had the same drop-dead, end-of-the-year deadline the bonds did, and they seemed the likeliest chance for the project’s opponents to succeed. Instead, they sold briskly in a matter of hours, or, as Ratner put it in a release, “The interest in the arena bond offering was beyond our expectations,” expectations that have always been highly optimistic, though also always on the money. Perhaps this is why they are already preparing to divert traffic starting next Monday to make way for construction.
The New York Times, $500 Million in Bonds Sold in 2 Hours for Nets’ Arena
The Times updates the story it broke on City Room yesterday.
Indeed, the demand for the bonds from institutional investors far outstripped what was available and belied the project’s tortured history and court challenges.
...The developer and his partners will raise the rest of the money for the 18,282-seat arena privately. Ratner, the chief executive of Forest City Ratner, is expected to complete the master closing for Atlantic Yards with various city and state agencies next week. At the same time, Ratner plans to close on the sale of an 80 percent stake in the Nets to the Russian billionaire Mikhail D. Prokhorov, pending approval by the N.B.A.
The two partners will invest $293.4 million in the arena and use a $131 million subsidy from the Bloomberg administration.
...According to the official statement for the bond offering, the N.B.A. issued a consent letter in October offering initial approval of Ratner’s financial plan for the team and the arena, including the sale of a majority interest in the Nets to Prokhorov for $200 million.
Still, Ratner and his underwriters say the N.B.A. is not expected to formally approve the Prokhorov deal until early 2010.
NY Observer, Atlantic Yards Sells Out
It's hard to imagine the project is finally in the clear, but the undying drama might not have much more to live on.
The bond sale—which had to be completed by January 1 to guarantee Mr. Ratner could use tax free bonds—was widely seen as the last serious hurdle facing the project, with opponents hoping the economic climate and legal uncertainty might scare away investors. That didn't happen. Now, Mr. Ratner just has to sell $146 million in taxable bonds—in addition to the $200 million he's pouring in—but that's expected to be relatively easy, even before today's strong showing.
Opponents are still hoping to topple the project with a number of outstanding lawsuits, but it would take a rather serious surprise for any of them to derail the project. The other longshot is the N.B.A., which may not want an enigmatic Russian oligarch as an owner—in which case, the drama would begin all over again.
Brownstoner, Investors Eat Up Atlantic Yards Arena Bonds
Not everyone felt quite as sanguine, however. “These bonds went on the market without any oversight from any state officials,” said Daniel Goldstein, spokesman for Develop Don’t Destroy Brooklyn, the main Atlantic Yards opposition group. “The state will be on the hook if the project defaults.”
GlobeSt.com, Bond Sale Complete on Atlantic Yards Arena
However, the legal challenges to Atlantic Yards are far from over. Following an appellate court’s ruling earlier this month against the state’s use of eminent domain in the planned Columbia University expansion in Harlem, plaintiffs in the Atlantic Yards case asked the Court of Appeals to reconsider its Nov. 24 decision. Specifically, they requested that the court hold off making any final decision on their motion and appeal until the court rules on the Columbia eminent domain case, which it will hear in early 2010.
NY Daily News, Developer Bruce Ratner sells $511 million in tax-free bonds to pay for new Nets arena
Ratner had to beat the clock to sell the bonds because the IRS has barred using such tax-free financing for sports stadiums starting Jan. 1. The rest of the $904 million arena will be paid for by state and city subsidies and private investment.
NY1, Investors Grab Up Brooklyn Arena Bonds
NetsDaily, With Bond Sale, Brooklyn Move Looks More Likely
Gothamist, Ratner Sells $511 Million In Atlantic Yards Bonds
Posted by eric at December 16, 2009 9:21 AM