Thursday, July 26, 2007

Crain's: suites at new NYC-area sports facilities should sell well

Though sports teams around the country are ripping out luxury suites, the New York-area market is an anomaly, and an article in this week's Crain's New York Business, headlined New arenas' suite deals, suggests that the planned suite-intensive Barclays Center at Atlantic Yards might do pretty well, even if it arrives later in the cycle.

Sports marketing executive Todd Parker told Crain's that the New York area has only 250 or so luxury boxes in all of its sports facilities combined, but with six new facilities expected to be completed in the three years, the total would leap to 900.

While "the competition for buyers could get intense" among the Devils, Nets, Mets, Jets, Giants, Yankees and Red Bulls, Crain's observes:
However, experts believe that the luxury-box market is in a unique position, since the city has been "starved" for corporate entertainment options but flush with cash from banks, hedge funds and law firms.

Too many events?

Crain's suggests:
Red Bull Park, Barclays Center and Prudential Center promise 250 to 300 events per year, which means competition for other types of entertainment will be fierce.

While Crain's doesn't connect the dots, sports economist Andrew Zimbalist, hired to assess new tax revenues from the Atlantic Yards project, assumed "no new arena in Newark," though the Prudential Center will open this year, at least two years before the Barclays Center. So competition would be fierce.

The Devils have already sold three-quarters of the 76 luxury boxes at the new Prudential Center. And the Prudential Center remains an interim option if Atlantic Yards remains delayed and the team owners want to escape the doldrums of the Meadowlands.

Barclays an icon?

Crain's waxes rhapsodically about the Brooklyn arena, though it fails to mention that the construction would likely go beyond 2009, and may be jeopardized completely by lawsuits:
The Nets' Barclays Center in Brooklyn, designed by architect Frank Gehry, promises to be an icon in sports. Though the arena's full design has yet to be revealed, and it is not scheduled to be completed for another two seasons, Nets Chief Executive Brett Yormark says he's already received countless requests for luxury boxes.

"The suites are all about high design and next-generation access," say Mr. Yormark, using terms like high-def, Wi-Fi and VIP in the same breath. Mr. Gehry will design all 118 suites individually, in his signature style, which features curved walls and odd angles. The average price will be about $275,000 per year.


Crain's acknowledges some risks for the Nets, ramping up from 29 current boxes in the current Continental Airlines Arena to some 170 suites in Brooklyn. And some Manhattan-based corporations might be deterred by Brooklyn. (Unmentioned: they'd really be deterred by an arena in Coney Island, which Atlantic Yards critics have suggested as an alternative, at least not without express subway service.)

However, Nets uber-marketer Yormark told Crain's he'd target Brooklyn businesses and "downtown Manhattan finance, fashion, law and construction firms." And, unmentioned by Crain's in this article, there's that sales office opening up this fall at the new Times Tower.

Number of suites

While Crain's reports that there would be 118 luxury suites, according to a Forest City Ratner document, Brooklyn Arena/Nets Financial Projections (p. 15 of PDF), released thanks to a lawsuit filed by Assemblyman Jim Brennan and State Senator Velmanette Montgomery, there would be 124 luxury suites, four party suites, and 40 loge boxes.

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