Wednesday, December 16, 2009

Curious omissions of the BALDC in most press coverage of the arena bond sale

There was a curious omission in most of the press coverage of the sale Tuesday of bonds for the Atlantic Yards arena: the issuing agency, the Brooklyn Arena Local Development Corporation (BALDC), an entity that deserves a lot more scrutiny.

The press release didn't claim that Forest City made the sale, but rather announced "pricing" and omitted mention of the BALDC, which, as a government-created not-for-profit corporation, is able to issue tax-exempt bonds to save the developer well over $100 million.

(When the tax-exempt bonds were supposed to total $678 million--rather than $511 million, as it turned out--the New York City Independent Budget Office estimated the savings to the developer at $193.5 million.)

Some--as I delineate below--ignored the role of the LDC completely, while others omitted its name, perhaps taking a cue from the New York Times, which, in initial CityRoom coverage, declared that developer Bruce Ratner sold the bonds, later adding "and a local development corporation."

Precise coverage of the bond sale

Bloomberg, Brooklyn Arena Sells $511 Million in Tax-Exempt Bonds:
Brooklyn Arena Local Development Corp., the state arm created to help finance a new basketball facility in New York City, sold $511 million of tax-exempt bonds at yields lower than a comparably rated deal last week.
The Record, Atlantic Yards project developers complete bond sales:
The Atlantic Yards project developers announced Tuesday that the sale of $511 million worth of bonds had been completed, further increasing the likelihood of a New Jersey Nets move to Brooklyn in 2012.

...The bonds were sold through the state-run Brooklyn Arena Local Development Corp., with repayment through annual revenue streams such as ticket sales, luxury suite and premium seat revenues, and $10 million annually in naming rights revenue from Barclays.
Not incorrect, but with the name omitted

Field of Schemes, Nets bonds are sold, beating IRS deadline:
Any thoughts that disinterested bond buyers might yet torpedo the Brooklyn Nets arena evaporated today, as a state development corporation sold $511 million in tax-exempt bonds today for the project.
New York Post, Atlantic Yards passes funding obstacle, clearing way for Brooklyn Nets arena:
The last major hurdle to bring the New Jersey Nets to Brooklyn cleared today when developer Bruce Ratner and a state-created local development corporation were able to sell more than $500 million in tax-exempt bonds to fund the team’s new arena.
Not incorrect, but incomplete

New York Observer, Ratner Wins Bond Financing for Nets Arena:
Mr. Ratner, owner of the Nets, has successfully marketed $511 million in tax-free bonds to build the arena, clearing the largest remaining hurdle to the project. Mr. Ratner's firm, Forest City Ratner, announced the news Tuesday afternoon, saying the bonds were priced at 6.48 percent.
NY1, Investors Grab Up Brooklyn Arena Bonds:
Investors made a fast break for bonds Tuesday that will help finance the New Jersey Nets' move to Brooklyn. The $511 million worth of tax-free bonds will help pay for part of the Atlantic Yards development.
Associated Press, Bonds for new Nets arena sell well:
A developer's plan to move the New Jersey Nets to Brooklyn has gotten a boost from Wall Street.

Investors quickly bought up $511 million in tax-free bonds that went on sale Tuesday to pay for part of the much-delayed project.
Incorrect

These articles suggested that Ratner sold the bonds, rather than marketed them via the BALDC.

New York Daily News, Developer Bruce Ratner sells $511 million in tax-free bonds to pay for new Nets arena :
Developer Bruce Ratner now has most of the cash he needs to build a new Nets arena in Brooklyn.

Ratner sold $511 million in tax-free bonds to pay for the arena Tuesday, clearing a major hurdle for the centerpiece of the Atlantic Yards project.
Crain's New York Business, Atlantic Yards bonds sell for $511M:
Forest City Ratner Cos. said Tuesday that it had completed the sale of $511 million worth of bonds that will be used to construct the sports arena that is at the center of its controversial Atlantic Yards project in Brooklyn.
Brooklyn Paper, Bonds away! Ratner’s tax-free bonds are snapped up fast:
Bruce Ratner scored roughly half the money he’ll need for his Atlantic Yards arena in a matter of hours yesterday, selling out $511 million in tax-free bonds that were snapped up by investors thanks to their high interest rate and investors’ faith in the project.

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