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July 5, 2012
Arena Names Can Spell Embarrassment
The New York Times
by Richard Sandomir
Barclays picked an awful time to be caught in a scandal and for its chief executive to resign.
In less than three months, Barclays Center in Brooklyn will open with a concert by Jay-Z, a minority owner of the Nets. That will be followed a couple of weeks later by two nights of music from the high priestess of the borough, Barbra Streisand. Soon after the buttah melts, the Brooklyn Nets will open their season.
And so while a lot has gone right for the Nets in the last 72 hours — agreements for a big trade and the re-signing of Deron Williams — the Barclays episode feels right out of the team’s haunted past.
NoLandGrab: More like an episode from the team's haunted present. The news that Barclays, with its sordid history, was illegally fixing interest rates should come as a surprise to no one. And its part and parcel of the crooked deals and crooked characters swarming like flies around that big pile of brown at the intersection of Flatbush and Atlantic Avenues.
Related coverage...
Atlantic Yards Report, Times Sports section agrees Barclays Center naming rights worth $200 million, suggests sum "hard for any team to turn down" (but why were naming rights given away, or not calculated as subsidy?)
So, the New York Times has agreed that the Barclays Center naming rights deal is worth $200 million, thus performing "rowback," which former Times Public Editor Daniel Okrent described in his 3/14/04 column as "a way that a newspaper can cover its butt without admitting it was ever exposed."
Remember, the New York Times Metro section, 7/19/11:
The new design from SHoP Architects and Ellerbe Becket for the arena, the Barclays Center, which the British bank will pay nearly $400 million to name...
My exchange with the Public Editor (actually his assistant), who resisted any correction to the more accurate figure of $200 million-plus, posted 8/3/11.
Sports Business Journal's confirmation that the naming rights deal has been renegotiated to $200 million, posted 9/19/11.
...But why should Forest City have had the naming rights in the first place? It's a publicly owned arena, albeit one rented to the developer for a buck, part of a fig leaf to get tax-exempt bonds issued, which are then repaid via PILOTs (payments in lieu of taxes).
Why should cities and states give away naming rights, in whole or in part? When asked in 2009, Steve Matlin, then an attorney for the Empire State Development Corporation, stated, “It’s part of the financing for the project."
While it certainly has been relied on by Forest City Ratner, it was never cited as part of the sources and uses for the project. Nor was it even counted as a subsidity in any cost-benefit analysis regarding the project, not even the one by the New York City Independent Budget Office.
Posted by eric at July 5, 2012 10:26 AM