This watchdog blog, by journalist Norman Oder, offers analysis, commentary, and reportage about the $4.9B project to build the Barclays Center arena and 15-16 towers at a crucial site in Brooklyn. Dubbed Atlantic Yards by developer Forest City Ratner in 2003, it was rebranded Pacific Park Brooklyn in 2014 after the Chinese government-owned Greenland Group bought a 70% stake going forward. As of 2018, after the arena and four towers were built, Greenland will own 95% of future construction.
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Prokhorov takeover of Barclays Center only needs ESDC staff approval; Veconi calls for AY CDC input before decision
It's widely known that Forest City Ratner/Forest City Enterprises has decided, in principle, to sell its 55% share in the Barclays Center operating company and 20% share in the Brooklyn Nets to Mikhail Prokhorov's Onexim, currently the owner of the other shares in the arena/team.
That transfer has not officially closed, apparently.
Will the sale need an approval vote by the board of Empire State Development (ESD)?, asked Prospect Heights resident Gib Veconi, at the bi-monthly Atlantic Yards/Pacific Park Community Update meeting last night, held at 55 Hanson Place.
After all, ESD, the state authority that oversees/shepherds Atlantic Yards/Pacific Park, technically owns the arena, thus allowing issuance of tax-exempt bonds to fund construction, and leases it to the arena operator under a sweet deal, in exchange for PILOTs (payments in lieu of taxes) that do not go to the state but are diverted pay off those bonds.
No, said ESD Senior VP Marion Phillips III, it's a staff action.
Veconi, a leader of the Prospect Heights Neighborhood Development Council, which, as a member of the coalition BrooklynSpeaks, has pushed to improve the project, expressed dismay. He noted that the arena relies on state-approved tax-exempt bonds, and sits on land assembled through threat of eminent domain. (And some was actually transferred via eminent domain.)
Phillips repeated that the transfer fell under the category of issues that only require staff actions.
Note that last year, the transfer of 70% interest in Atlantic Yards, excluding the arena and the B2 tower, to the Shanghai government-owned Greenland Group did not need ESD board consent, but the board did vote approval in order to avoid doubt or ambiguity. This seems a somewhat parallel situation.
Atlantic Yards CDC input requested
"Well, I would like to go on record as suggesting that Atlantic Yards Community Development Corporation [AY CDC] board is convened before that decision is made," Veconi responded, citing the advisory body set up last year as part of a settlement aimed to deliver project affordable housing by 2025. (That's ten years faster than the previous extended deadline, though still 16 years after the project's most recent approval.)
"The idea that we're now going to transfer controlling interest in an arena to a foreign owner strikes me as not a good idea unless we have already agreed on a plan to address some of these issues," he said.
I'd add that, putting aside whether the owner is foreign or not, the sale means that the arena operator is no longer an owner of the rest of Atlantic Yards/Pacific Park, and thus has less incentive to respond to public concerns. In fact, the arena operator and the owners of the rest of the project may now be at odds.
"I don't think a new owner will be motivated to address them more than the current owners," Veconi said. "I would like Atlantic Yards CDC to have an abillity to weigh in on what some of the mitigations might be" before the transaction is approved.
The next AY CDC meeting, however, has not been scheduled.