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June 22, 2010
A Russian Billionaire, the Nets and Sweetheart Deals
The New York Times
by Norman Oder
We had to read that byline three times, too. Yes, Atlantic Yards Report's Norman Oder, voluble critic of The Times's Atlantic Yards coverage (or lack thereof), has gotten inside the Death Star.
The Russian billionaire Mikhail D. Prokhorov, the Nets’ new majority owner and the N.B.A.’s first overseas owner, magnetized members of the news media during his recent whirlwind tour of New York.
Prokhorov, a 6-foot-8 kick boxer, international playboy and shrewd businessman, did his best to make people forget the team’s performance last year at the dreary Izod Center in East Rutherford, N.J. He was droll (“America, I come in peace”), playfully evasive about changing the team’s name and confident of a championship in five years “maximum.”
As Prokhorov, Russia’s second-richest man, dangles cash for a coach, free agents and first-class facilities, let’s not forget the money that he and his business partner Bruce C. Ratner saved because of taxpayer help for the arena under construction in Brooklyn. The help includes eminent domain, major subsidies, a naming-rights giveaway and bad, undemocratic urban planning.
...“Sports entertainment corporations” (an apt term from Bettina Damiani of Good Jobs New York) have been quite successful at getting the public to pay for sports facilities. The financing for the nearly $1 billion Barclays Center is more subtle, but the public still pays significantly.
Consider that the state and the city each allotted $100 million, ostensibly for infrastructure like utilities. The city’s subsidy, part of which could be used for land, went solely to reimburse Ratner for property he bought from residents and businesses.
Later, Mayor Michael R. Bloomberg allotted $105 million for infrastructure. That was not enough; Bloomberg agreed last year to shift $31 million from that sum to land, making it likely that future mayors will be asked to pay more for infrastructure. The New York City Independent Budget Office calls the arena a net loss for taxpayers.
A more direct gift involved arena naming rights, once reported at $400 million, now at least $200 million.
Why do the arena operators keep the naming-rights revenue for what the state calls a publicly owned arena?
...Prokhorov’s strategy, off to a flying start, is to build a dynasty, become a household name in North America and open investment opportunities.
But the arena process should have been fair, and he should have paid full freight. Surely he can afford it.
NoLandGrab: Thanks, New York Times! That's only about three years too late.
Photo: Yana Paskova for The New York Times
Posted by eric at June 22, 2010 10:40 AM