Monday, August 04, 2008

Bruce Ratner makes it official: AY arena would open in mid-2011 (best-case scenario)

Despite public statements to the contrary, as on the Barclays Center web site (right), the New Jersey Nets have three, not two, more years at the Izod Center in the Meadowlands--and that's in a best-case scenario.

The word comes directly from Forest City Ratner president (and Nets majority owner) Bruce Ratner, who indicated to shareholders in June that construction would start in January and take two-and-a-half years--a timetable far different from the developer's and team's public statements, including to season ticket-holders.

Indeed, just last week, during a July 30 Fox Business Channel segment (go to 3:43), Nets Sports & Entertainment President CEO Brett Yormark claimed, "We plan on breaking ground in November and being there for the '10-'11 season."

[Update: FCR's Bruce Bender tells the Observer: "It is not a new schedule. I think Bruce was just stating that the schedule in place is in fact very aggressive. We plan to break ground this fall and are working to open in calendar year 2010. While that's the goal, if it is not met then it would end up being calendar year 2011."

That's about as trustworthy as Chuck Ratner's clarification last year, when, after slipping and indicating the arena would open in 2010, insisted that he meant 2009.]

In May, claims of 2010

Yormark was consistent with the developer's rhetoric. Remember, in a May 4 op-ed in the Daily News (excerpt at right), Bruce Ratner stated that the developer aimed "to break ground on the Barclays Center later this year," then "break ground on the first residential building," complete and open both at the same time, then "break ground on the next residential tower in 2010."

That sequence suggests a 2010 arena opening; indeed, the accompanying Daily News article reported 2010 as the arena opening date. (Note that the FAQ on the Atlantic Yards web site (below) leaves some wiggle room, because it does not indicate that construction on the second residential tower would begin after the arena and first tower were completed.

Governmental officials buy the 2010 opening date. In a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department, arguing that the AY arena deserves tax-exempt bonds under a more lenient standard, the New York City Industrial Development Authority and the Empire State Development Corporation repeated the claim that the arena was anticipated to open in 2010.

In the May 12 Sports Business Journal, Yormark said the arena would open in time for the 2010-11 season.

However, a May 15 press release announcing the sale of luxury suites promised an opening in "calendar year 2010," which I suspect might mean New Year's Eve, given that the three-year bridge reconstruction schedule ends in January 2011.

In June, candor about 2011

A month later, at the June 19 annual meeting in Cleveland of Forest City Enterprises, parent of Forest City Ratner, Bruce Ratner revised his prediction by one year, to mid-2011, which means the arena would open for the 2011-2012 season, three seasons from now.

While the webcast of the meeting has expired, the transcript is available (for sale) and has not been corrected, so I'm assuming this segment is correct:

WILBUR BLACK: I'm [Wilbur Black], and I've been attending for many years. We were wondering, my grandson, was wondering about your New York Nets -- or New Jersey Nets, the situation on that...

ALBERT B. RATNER: Okay. Bruce, do you want to answer the Nets question?...

BRUCE RATNER: I don't know whether your grandson is a Nets fan or a Brooklyn fan or both so I know how to answer the question. But we're doing very well on the Atlantic Yards project. Our hope is that we can close our loans and close the transaction by the end of the year. And then it will be about two and a half years to build our arena, and then the Nets will move from New Jersey to Brooklyn. So, we're working hard at it, and I think we're finally close to a closing.
(Emphasis added)

If it takes 2.5 years to build the arena, and construction starts in January 2009, the arena would open in July 2011. Still, keep in mind that the Nets have extended their lease in their current facility to 2012-13, just in case.

Also keep in mind that there's no certainty that groundbreaking for the arena would occur in January--legal cases, including the just-filed state eminent domain lawsuit, may still be pending.

Misleading the public and ticket holders

Beyond the regularly misleading statements to the public, Forest City Ratner has been deceiving season ticket-holders. On July 8, NetsDaily reported, some 40 such supporters were told at an event in Manhattan that the team “anticipates” playing in the Barclays Center during the 2010-11 season.

That was more than two weeks after Bruce Ratner told shareholders in Cleveland something very different.

As noted, Yormark repeated that timetable during the July 30 Fox Business Channel segment.

Last year, it was 2009

Remember, when the project was announced in 2003, the arena was to open in 2006. When the project was approved in December 2006, the construction schedule anticipated an arena opening in October 2009.

Speaking to investment analysts in March 2007, Forest City executive VP Bob O'Brien slipped and said that "hopefully" the "ball team" would open in 2010, and Forest City CEO Chuck Ratner seconded that.

Ratner soon tried to recover, issuing a statement, "We remain committed to our goal of opening the arena in time for the 2009-2010 NBA basketball season.” I pointed out that was unlikely, given the delays in the construction schedule.

In April 2007, then-FCR executive Jim Stuckey claimed in court papers that "The current work is proceeding in accordance with an intricate schedule that is intended to allow the new arena to be completed in time for the Nets to relocate there for the 2009-10 National Basketball Association season."

In May 2007, Nets president Rod Thorn acknowledged the move could be in 2010.

In September 2007, Yormark told WFAN the arena would open for the 2009-10 season.

At the end of October, when the basketball season began, Bruce Ratner began what No Land Grab called a "soft release," acknowledging that sometime in 2010 was more likely.

Several media outlets, in early January, began reporting the 2010 date, despite evidence, from the bridge reconstruction schedule, that the real story was 2011.

Later in January 2008, FCR executive MaryAnne Gilmartin claimed in court papers, "The current work is proceeding in accordance with an intricate schedule... that is intended to allow the new arena to be completed in time for the Nets to relocate there in 2010."

In May 2008, Yormark told Sports Business Journal the arena would open in time for the 2010-11 basketball season. Soon after that, the claim became "calendar year" 2010.

Now, as Bruce Ratner acknowledged, the target is 2011.

They have even more time

Meanwhile, in September 2007, FCR and Empire State Development Corporation signed a State Funding Agreement that gives the developer six years after the exercise of eminent domain and the conveyance of property to build the arena.

(That deadline, actually, was in the revised General Project Plan. The State Funding Agreement wasn't made public until March of this year.)

So that extended lease in New Jersey might be a good fallback

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