Monday, January 25, 2010

Finally, in landlord-tenant agreement, an official grant of arena naming rights; was there one in January 2007?

When Forest City Ratner announced in January 2007 that it had signed a naming rights agreement with Barclays Capital for the Atlantic Yards arena, did it have the right to sign such a deal?

Even though I suspect that clearance for the deal was at some point secured--could they have just winged it without authorization?--documents that have surfaced as part of the Atlantic Yards master closing documents, first made available today, raise some questions.

Landlord-tenant agreement

A landlord-tenant agreement for the arena states, as noted below (click on graphics to enlarge), that the "Tenant shall have the exclusive right to designate the name of the Arena and to grant to one or more third parties" the right to include its name on and around the arena.

And the Tenant would get "such other rights and benefits which are customarily included"--i.e, payments.


As far as I know, no previous document that has surfaced publicly shows that the Empire State Development Corporation or its affiliates assigned naming rights to the developer.

Hands off?

Another clause in the agreement states that "Tenant acknowledges that Landlord has not approved or otherwise consented to the Barclays Naming Rights Agreement," but the Landlord has instead executed a "recognition agreement."

In other words, hands off.


Why the giveaway?

The question remains: why did the state simply give away naming rights to a (nominally) publicly-owned arena rather than keep a slice, as has been done in a few other cities?

The only answer we have is from ESDC attorney Steve Matlin at a community information meeting last July: “It’s part of the financing for the project,”

While it certainly is counted on by Forest City Ratner, it was never, as far as I know, suggested to be part of the benefits or part of the sources and uses for the project.

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