Skip to main content

Brett Yormark, remixed: Nets CEO's shifting predictions on arena opening date

A good salesman always sounds convincing, even if underlying facts change the spiel, and New Jersey Nets CEO Brett Yormark is at the top of the game.

In three radio or TV interviews over less than 15 months, Yormark offered unwavering predictions about the opening date of the Atlantic Yards arena (aka Barclays Center) in Brooklyn. First, he said 2009, then 2010, then 2011.

Just take a listen to this one-minute audio file or simply click below.

I’ve interpolated my own questions into the remix, but the original quotes come from the interviews transcribed below.

Why such confidence?

Why does Yormark radiate such confidence? I suspect the goal is to attract additional sponsors and buyers of suites. If the arena seems like a mirage, it'll be harder for them to sign on the bottom line.

Yormark sometimes qualifies his certainty, but mostly he doesn’t; he just moves on and offers a new prediction. Maybe that’s a habit developed in SportsWorld, where interviewers are often fawning or unprepared.

By contrast, the Empire State Development Corporation and Forest City Ratner more frequently use words like “expected” or “anticipate,” prudently leaving wiggle room in case the announced schedule won’t be met.

Bonus: at right is an excerpt from press materials distributed 12/10/03, in which Forest City Ratner suggested completion of the arena was "set for the summer of 2006."

“We’ll be in Brooklyn for the '09-'10 season”

In a 9/12/07 interview on WFAN radio, Yormark mentioned the move four times; two times he hedged slightly and the other two times he expressed certainty.

He was asked: What have your challenges been, marketing this New Jersey team? Because New York has always traditionally been a Knicks town. What have you overcome to get the name out there, particularly with this move to Brooklyn?

BY: Well, it has been challenging. When you think about what the next couple of years has in store for us: we’re leaving New Jersey, we’ve been very honest about it, and we’ll be in Brooklyn for the '09-'10 season. And our goal is not to alienate our core fan base in New Jersey, but at the same time encourage people from the other side of the river to start to test drive us, to sample us."

A little later a caller suggested that the move was more likely three years away, not two. Yormark hedged slightly.

BY: There's a lot of activity on the site right now, we're doing a lot of demolition. We're relocating the railyards. We've just ordered steel and we're expecting, hopefully, to break ground, in October-November. It usually takes about 24 months to build an arena that's 850,000 square feet, so we think we're going to be right there for the '09-'10 season, and very excited about it.

A little later, however, he returned to certainty.

BY: And when you think of Brooklyn, if it wasn't a borough it would be the fourth largest city in the U.S., it's been underserved in the area of sports entertainment for years, and we will be there for the '09-'10 season, and it's going to be one of those great moments in sports.

A bit later, he hedged once again.

BY: We’re extremely excited, as you know, about our move to Brooklyn, but we do have at least two years in Jersey, and while we’re in Jersey, we’re going to provide a great, great experience, a great product.

As I pointed out that the time, even Forest City Enterprises executives, speaking a day earlier, didn’t think lawsuits would be cleared until the middle of 2008.

Anything other than a faux groundbreaking couldn’t begin until then. Thus, the process Yormark said would take 24 months wouldn't have begun until 2008, which moved the arena in 2010, not 2009.

Actually, Bruce Ratner has said it would take 30 months and the ESDC’s construction schedule suggests 32 months. Though it's possible that, in the absence of other major construction project, construction could be accelerated, until such a speed-up is announced, we shouldn't accept a 24-month estimate.

[Update 10/22/09: the new architects say it would take 26 months.]

Bonus: Yormark contradicts himself

Yormark, in a 12/12/08 Star-Ledger profile, improbably suggested that, if not for me, he wouldn’t have taken the job with the Nets: “And he's the guy responsible for me having this job -- totally sold me on Brooklyn, totally sold me on the Ratner project."

Let’s go to the audiotape. He told WFAN in the above interview:
This is a job that I had my eyes on for quite some time. I started my career in 1988 with the Nets selling tickets. And my dream was always to come back and to lead the franchise.

“We plan on... being there for the '10-'11 season"

In a 7/30/08 Fox Business Channel interview focusing on sponsorship interviews, Yormark was given the opportunity to pitch the Nets.

His answer:
Things are going really well for us. In May, we opened up the Barclays Center showroom, in the New York Times Building. And we are selling our suites, and doing quite well. What we’re finding is that big companies, and brands, are investing, for the long haul, and we’re hoping that that investment will be part of the Barclays Center.

With respect to our other advertisers that we’re talking to, with respect to being involved with the Barclays Center, that’s going well, also. We recently announced seven of our 14 founding partners. A couple more are on the way. So we’re very excited about the interest. We plan on breaking ground in November and being there for the '10-'11 season.

As I pointed out at the time, Bruce Ratner had told shareholders a month earlier that construction would start in January 2009 and take two-and-a-half years--a timetable far different from the developer's public statements.

So Yormark, whose phrase “plan on breaking ground” offered a bit of a hedge, certainly knew better.

After all, an expected eminent domain suit had not yet been filed in state court--it was filed a few days later--and there was no reason to think it would be resolved by November. But that admission might have deterred some additional "founding partners."

An arena in three years? “Absolutely”

On 12/2/08, after Forest City Ratner had stalled all work at the MTA’s Vanderbilt Yard--but before that was widely known--WFAN host Craig Carton pressed Yormark (audio) and the CEO finally responded with an ironclad prediction.

CC: So let's get down to the bottom line here. You're not moving to Brooklyn.

BY: We are moving to Brooklyn.

CC: You're not moving to Brooklyn.

BY: We're moving to Brooklyn.

CC: Why can't you guys come clean and just be honest?

BY: We're moving to Brooklyn.

CC: How are you going to move to Brooklyn? [Chuckles] They haven't put a shovel in the ground yet.

BY: Craig, as we all know, it’s challenging to build in New York. And this project has presented its challenges, but we are going to get to Brooklyn. Right now--

CC: Give me a realistic time frame, because it ain’t going to happen in the next two years, or the next three either now, right--

BY: A realistic time frame is in Brooklyn, operating in the summer of 2011, being there for the '11-'12 season.

CC: So being there in the fall of 2011, so three years from this season--

BY: That’s correct--

CC: --you think that you’ll have everything built, the infrastructure done, and you will bounce a basketball in an arena in Brooklyn in three years?

BY: Absolutely. Convinced of it.

Drop-dead date?

Co-host Boomer Esiason then moved on to another topic, the Barclays naming rights recommitment, and Yormark said that nine founding partners had signed on. Then Carton returned to the timetable.

CC: There's got to be a drop-dead date. You can't keep Net fans and the borough of Brooklyn out there waiting and waiting and waiting.... Ballpark, what's the date on that?

BY: I think 2009's the year. Right now--

CC: If you don't put a shovel by next New Year's Eve, then you might come back and say 'You know what, we're not going to Brooklyn'?

BY: I wouldn't say that but I would say 2009 is the year. I say that for lots of different reasons. We've got really one piece of major litigation that remains... the eminent domain case. There will be a hearing in January, hopefully a favorable decision by the end of March... We just had a favorable ruling with the IRS, to use tax-exempt financing for the building. And Barclays, obviously, has reaffirmed their position. So I feel that 2009 is our year.

So, while Yormark is absolutely convinced that an arena will open in 2011, he's leaving open the option for construction to begin after 2009--meaning an opening date no earlier than 2012.

Timetable questions

Yormark may have convinced himself, but his best-case timetable is very unlikely.

Not only must current and future lawsuits have to be cleared by mid-April for groundbreaking to meet Bruce Ratner’s 30-month timetable, but also the credit markets have to recover.

If the timetable is, in fact, 32 months, the lawsuits would have to be dismissed by mid-February.

And that's assuming nothing else goes wrong. Given the shifting predictions--remember that 2006 opening date?--caution, rather than confidence, seems more prudent.

When will Yormark start offering 2012 as a best-case scenario?

Privately, I suspect, he’s already doing so. Publicly, however, he’ll first have to face some interviewers armed with inconvenient facts.


Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…