http://www.nypost.com/p/news/local/brooklyn/nba_deal_is_net_loss_for_klyn_0jQTL97MrYcvmOMqct4TOK
The hoop-la has faded in Brooklyn.
When the Atlantic Yards complex was announced in 2003, its developer promised the borough a basketball team, world-class arena designed by Frank Gehry, 16 soaring residential and office buildings, affordable housing, parks and recreational facilities.
To make the grandiose plans come true, some 800 residents and businesses were dispossessed and city and state taxpayers kicked in $305 million so far.But it's looking like all Brooklyn will be left with is one of the worst teams in the NBA -- playing in a new, nondescript facility.
Documents filed last week with the Securities and Exchange Commission by developer Bruce Ratner and his Forest City Enterprises warn that the non-arena portions of the plan could experience "further delays" leading to most or all of the rest of the 22-acre, $4.9 billion project being scrapped.
Risks to investors cited in the SEC filings include the potential of rising construction costs and financing rates, loss of arena sponsorships and inability to meet government-approved construction deadlines.
"If any of the foregoing risks were to occur we may . . . not be able to develop Brooklyn Atlantic Yards to the extent intended or at all," according to one of the developer's SEC filings.
Ratner and Forest City -- in a doomsday scenario -- could potentially lose $525 million on the project, "excluding any potential write-offs for the arena" and "liquidated damages," the filings say.
Forest City reported "record" earnings the past year ending Jan. 31, in part fueled by selling Russian billionaire Mikhail Prokhorov a majority interest in the money-losing New Jersey Nets, who will move to the Barclays Center arena for the 2012-13 NBA season.
Councilwoman Letitia James (D-Brooklyn) and Prospect Heights activist Patti Hagan, both longtime foes of Atlantic Yards, said the SEC documents are the latest "proof" that Ratner can't deliver 2,250 affordable housing units and most of the 17,000 jobs he promised state officials in order to gain project approvals.
"It was all just a mirage," James said. "He underestimated the economy and opposition, and now all we're getting is an arena and a large parking lot."
The filings also reveal the Prokhorov deal in May was a greater financial windfall for Ratner than what was announced publicly.
Prokhorov paid Ratner $223 million for 80 percent of the Nets and 45 percent of the arena, and agreed to pay for $60 million in team losses and assume 80 percent of the Nets' $200 million debt. Both parties had claimed the deal was for $200 million and other "funding commitments."
Forest City spokesman Joe DePlasco insisted, "We've invested hundreds of millions of dollars in this development and remain 100 percent committed to building out all of Atlantic Yards."
The arena is set to open in summer 2012, but the timetable for the rest of Atlantic Yards remains unclear.
4/5/2011 9:25 AM
