Skip to main content

Number of projected Brooklyn arena events declines to 200, but the state couldn't have adjusted revenue estimates

A 9/16/09 Barclays Center press release about suite sales slipped in some new information:
In addition to NETS Basketball, most suite buyers will receive access to other Barclays Center events, anticipated to include world-class concerts, college sports, the circus, ice shows, and much more. Overall, the arena will host over 200 events annually.
(Emphases added throughout)

That number represents a small but steady decline in Forest City Ratner's official projections and an implicit acknowledgment of a competing arena in Newark.

It also suggests that the economic projections by both Forest City Ratner consultant Andrew Zimbalist and the Empire State Development Corporation (ESDC) were overstated, since they based sales tax assumptions on about 225 events.

And, even though the projection of 200 events obviously can't be confirmed, that number backs up the more conservative estimates made by the New York City Independent Budget Office (IBO).

2004 projections

Zimbalist, in his 5/1/04 report, wrote:
FCRC projects that the arena will not host an NHL team and that it will host 224 events during the year (assuming the eventual closing of CAA [Continental Airlines Arena, now the Izod Center], no new arena in Newark, no NHL and no minor league hockey events at the Atlantic Yards arena.) FCRC projects out three scenarios over time based on aggressive, moderate and conservative assumptions. I use the estimates from their moderate scenario.
As Gustav Peebles and Jung Kim pointed out in their 6/21/04 critical analysis of Zimbalist's report, the number of events, and thus sales taxes, was likely overstated:
The problem with this scenario is that it allows no place for the New Jersey Devils to play ice hockey... His analysis also fails to account for inter-arena competition for non-sports events.
Indeed, the Prudential Center is now open in Newark, and looking to coexist with the Izod Center in the Meadowlands.

2005 projections

From the May 2005 Forest City Ratner bid to the MTA:
The arena is expected to host approximately 250 events a year. The Arena will also be made available for local schools and universities for athletic events, and per the CBA, ten days will be set aside for "community uses" to be programmed with CBA partners.
I read that as indicating that the arena would host 250 events plus local school athletic events and "community uses."

From the 5/26/05 FCR presentation (right) to City Council:
Approximately 235 events per year in the arena.
From Zimbalist's June 2005 report:
Many of the numbers used in this report concerning Nets attendance, ticket prices, construction costs and other items come from projections done by or for the Nets. I have discussed these estimates with the Nets and they seem reasonable to me. The Nets project that the arena will not host an NHL team and that it will host 226 events during the year (assuming the eventual closing of CAA, no new arena in Newark, no NHL and no minor league hockey events at the Atlantic Yards arena.) The Nets project out three scenarios over time based on aggressive, moderate and conservative assumptions. I use the estimates from their moderate scenario.
The IBO report

The September 2005 Independent Budget Office Fiscal Brief was a bit more cautious:
In addition to the Nets’ 41 regular season games, preseason games and potential playoff games, FCRC expects that more than 150 other general admission events would be held at the new arena, including 40 concerts, 35 other sports events such as high school basketball games, and about 80 family-style entertainment shows.
That actually adds up to less than 200 events.

Comments to ESDC in 2006

As the Empire State Development Corporation (ESDC) considered the project in 2006 (as I wrote 12/5/06), Brooklyn resident Kate Galassi commented:
The economic benefits from the arena are based on the assumption that the arena will be hosting events 224 days a year. [Economist Andrew] Zimbalist’s report estimates this number assuming the closing of the Continental Airlines Arena and no new arena in Newark. If these assumptions do not hold true, then the estimated benefits of the arena will be substantially reduced.
The ESDC responded:
The analysis reflects the expected programming of the arena. If there were fewer events and lower attendance at the arena, fiscal benefits associated with the arena (sales tax on tickets, parking, and concessions) would be lower than those reported in the EIS. If the number of events and attendees were higher, the fiscal benefits would be higher... Andrew Zimbalist’s report on the economic benefits of the proposed project was not prepared for ESDC and is not included, relied upon, or referenced in the DEIS.
Though the ESDC didn't rely on Zimbalist's conclusions, it surely seemed to project the same number events, almost surely from the same source: Forest City Ratner.

A 12/8/06 ESDC press release announced approval of Atlantic Yards:
The project build out will occur in two phases. The first phase, anticipated to be completed by 2010, will include the new rail yard and the arena and developments on the western portion of the site. At least 30 percent of the housing developed on the arena block in the first phase will be affordable housing. The arena is expected to be in use for approximately 225 events per year (inclusive of 41 home games for the Nets.)
And in 2009

The 6/23/09 ESDC 2009 Modified General Project Project Plan maintained the same numbers:
Based on the current schedule, the Arena would open during the 2011 – 2012 NBA season and is expected to be in use for approximately 225 events per year, including 41 regular season home games for the Nets.
However, less than three months later, and one day before the ESDC approved the plan, the developer said there would be 200-plus events, as noted at top. Maybe that's why the ESDC's 9/17/09 press release did promise any specific number of events.

But it certainly calls into question ESDC Senior Counsel Steve Matlin's assertion in July that the agency's economic analysis was "constantly" being updated.

The IBO, in its September 2009 report, did not specify a number of events, but that number had not changed from 2005. The IBO's George Sweeting explained:
For our 2009 analysis of ticket, food, and concession sales at the arena we did not develop specific estimates of the number of events (Nets or other). Instead, we started from FCRC’s estimates of revenues for those items shown in their 2006 Atlantic Yards Financial Projections, adjusted for inflation. The estimates for non-Nets events were already aggregates which is what we needed for the analysis. Therefore, there was no need to take a step back and calculate the number of events underlying the reported amounts.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…

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…