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December 31, 2009
Ratner’s Next Nets Arena Challenge: Raising $324 M.
NY Observer
by Eliot Brown
The footprint of the planned new Nets arena in Brooklyn looks like a construction site. Developer and Nets owner Bruce Ratner closed on tax-free financing and other approvals for the project last week, and now fencing with flashy renderings of the project runs along Flatbush Avenue; traffic has been redirected to make way for equipment. The massive $4.9 billion Atlantic Yards project, or at least the $900 million centerpiece basketball arena, is looking like a reality.
But a glance at a lengthy set of public documents linked with the $511 million in tax-free bonds that go toward the arena show that there is still more of the hill for Mr. Ratner to climb. If the developer doesn't raise $324.8 million within a year for the arena, he could be forced to refund the bondholders' money, returning the financing that makes the project possible, according to the documents.
...If the money isn't deposited by Dec. 17, 2010, the documents say, this would trigger a refund of the bonds, or "extraordinary mandatory redemption," in bond speak.
Some of this money will come from Mikhail Prokhorov, the tentative new buyer of the Nets, who has agreed to pay $200 million for 80 percent of the team and 45 percent of the arena-to-be.
Posted by eric at December 31, 2009 10:22 AM