Skip to main content

Goldman Sachs buys Google ads to promote its role in getting Louisville arena built; what about Brooklyn?

Attached to a 5/7/11 Boston Globe review of sportswriter Robert Lipsyte's new memoir was the advertisement at right, in which financial behemoth Goldman Sachs promotes its role in the new arena in Louisville, KY.

Presumably such Google ads are being bought wholesale, attached to other sports coverage.

"See how the construction of a new arena helps businesses downtown," states Goldman, pointing to a web page and film, with the summary:
Now, new businesses are opening, new jobs have been created and downtown Louisville is more vibrant than ever, with new restaurants and services available to local residents and visitors.
What about Brooklyn?

Will Goldman, which arranged the bond financing for the Atlantic Yards arena (aka Barclays Center), promote its role in the new facility? Likely.

But the promotion will have to be more subtle. New businesses? Sports bars, sure, but local residents surely have enough restaurants and services.

New jobs? Surely not nearly as many as promised during the heady days of "Jobs, Housing, and Hoops."

New housing? Not Goldman's problem.

Louisville overview

The web site for the Louisville project points further to this summary:
The University of Louisville men’s and women’s basketball programs are among the most prominent in the nation, but to attract NCAA tournament games and other high-profile events, the university needed a new facility.

In 2006, the Kentucky Governor’s office established the Louisville Arena Authority (LAA) to study options for a new home for the men’s and women’s teams. The state, the city and the university ultimately sought a downtown venue, providing an opportunity for economic growth in the city through tourism, nightlife and shopping. Due to its significant expertise securing financing for major capital projects and sports facilities in particular — especially in cases where financing was complex — Goldman Sachs was selected to manage the financing for the facility.

The $349 million facility, with funding structured by Goldman Sachs and LAA, created thousands of construction jobs, as well as permanent employment and economic development in downtown Louisville.

Complexity of Funding
To service the bonds needed for construction, Goldman Sachs and LAA built a plan around three revenue sources. The Commonwealth of Kentucky committed incremental tax revenues; the City of Louisville committed to regular

payments; and additional funds were projected to come from ticket sales, concessions, advertising and other revenue streams generated by the arena.

Typically, financing a college sports facility of this size is fully supported by revenues from a university or municipality. In this case, the financing structure was dependent on several different revenue sources, each with its own characteristics regarding timing, amount and how the money could be spent. In addition to up-front public funds, the financing also relied on future funding provided by projected arena revenues and increased tax revenues resulting from the revitalization of the downtown area.

Goldman Sachs helped LAA develop this unique financing structure and helped ensure that LAA would be able to meet its obligations, even under extreme stress. Such efforts were critical to providing investors with comfort that the project would be completed on-time and on-budget and that the ongoing arena revenue would meet initial forecasts. Ultimately, Goldman Sachs’ work with LAA helped raise the money needed to begin construction in time to open the arena for the 2010-2011 basketball season.

Local Workers, Local Impact
An important aspect of the arena project was to ensure that minorities, women and local workers from Kentucky and southern Indiana were involved in its construction. The participation goals were reached or exceeded in all cases.

LAA engaged this diverse workforce by partnering with local stakeholders to establish the Construction Pipeline Project, a program designed to train local workers in construction and related trades, thus opening the door to new careers for local residents for this and future construction projects.

The 22,000-seat arena, known as the KFC Yum! Center, opened on October 10, 2010. It now hosts collegiate sporting events, concerts and family-friendly shows, creating a year-round rotation of downtown entertainment. By enhancing tourism, the arena has brought new hotel and restaurant business to an underutilized area of downtown.

Louisville’s Arena Created Jobs and Revitalized Downtown
  • Over 3,500 workers drawn largely from the Louisville metropolitan area helped build the arena.
  • The arena has created close to 1,000 new jobs in operations, security, venue services, food service and administration.
  • The local economy benefited from an estimated $100 million of subsequent investment associated with new development projects, such as sports bars, restaurants, modern loft-style apartments and other new businesses.
Goldman Sachs’ Commitment to Louisville
  • With the combined, diverse contributions of the university, city and state, financing for Louisville’s arena was particularly complex. Ultimately, this project represents one of the largest financings for a college sports facility to date.
  • The total bond offering was $349 million. In a challenging market environment, Goldman Sachs’ expertise was critical to achieving the 30-year financing terms.

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…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

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…

"There is no alternative": DM Glen on de Blasio's affordable housing strategy

As I've written, Mayor Bill de Blasio sure knows how to steer and spin coverage of his affordable housing initiatives.

Indeed, his latest announcement, claiming significant progress, came with a pre-press release op-ed in the New York Daily News and then a friendly photo-op press conference with an understandably grateful--and very lucky--winner of an affordable housing lottery.

To me, though, the most significant quote came from Deputy Mayor Alicia Glen, who, as the Wall Street Journal reported:
said public housing had been “starved” of federal support for years now, leaving the city with fewer ways of creating affordable housing. “Are we relying too heavily on the private sector?” she said. “There is no alternative.” Though Glen was using what she surely sees as a common-sense phrase, it recalls the slogan of a politician with whom I doubt de Blasio identifies: former British Prime Minister Margaret Thatcher, a Conservative who believed in free markets.

It suggests the limits to …