|FCR 2005 bid to MTA: 250 events|
Only 180 to 200 a year, which is fewer than predicted many times by arena developer Forest City Ratner, governmental allies, ratings agencies, and consultants, we now know.
The lesson, yet again, is to take self-serving predictions with a large grain of salt. (Note that, as detailed below, the New York City Economic Development Corporation and the New York City Independent Budget Office more accurately predicted numbers under 200. )
|August 2016 to potential bond buyers: 180-200 events in first three years|
The arrival of the New York Islanders hockey team means the Barclays Center did finally host 240 events in the fourth year of operation. (Given the timing of the Official Statement, I'm assuming they counted the fourth year as beginning at the end of September 2015, which was approximately one year earlier,)
The increased event count doesn't necessarily translate into huge profits, so it's possible that if the Islanders leave the arena might earn more profits from fewer events. (I'll write more on this soon.)
|FCR 2005 City Council presentation: 235 events|
Overly optimistic predictions of events
Repeating and augmenting my September 2013 article on the number of predicted events, it's clear many were optimistic and unrealistic:
- 224: May 2004. Source: Report by Forest City Consultant Andrew Zimbalist
- 250, May 2005. Source: Forest City’s bid to the MTA
- 226: June 2005. Source: Report by Forest City Consultant Andrew Zimbalist
- 235, May 2005. Source: Forest City presentation to City Council
- 192, June 2005. Source: NYC Economic Development Corporation analysis
- 194+, September 2005. Source, New York City IBO Fiscal Brief
- 225: July 2006 General Project Plan, Empire State Development Corporation
- 225: June 2009 Modified General Project Plan, Empire State Development Corporation
- 200+, September 2009. Source: Barclays Center press release
- 225, December 2009. Source: ratings agency Moody's
- 220, December 2009. Source: Forest City, according to ratings agency Standard & Poor's, which called estimate “aggressive”
- 184-214, December 2009. Source: consultant Conventions, Sports & Leisure International, part of Official Statement for bond buyers
- 220, December 2012. Source: Arena CEO Brett Yormark interview in Gotham magazine.
- 200+, June 2013. Source: Forest City Enterprises investor presentation
- 200+, October 2013. Source: Barclays Center press release
The fundamental flaw
Zimbalist's hired-gun report, based on Forest City numbers, was likely the basis for Forest City projections and thus ESDC projections.
However, he not only assumed the Brooklyn arena would not host an NHL team, his calculation presumed the eventual closing of Continental Airlines Arena (later Izod Center), and no new arena in Newark.
The problem, as analysts Jung Kim and Gustav Peebles pointed out in 2004, is that that left no place for the New Jersey Devils to play. And, indeed, they moved to Newark, and the Prudential Center continues--and competes with the Barclays Center and Madison Square Garden for certain events.
The recent assessment
Here's the text from the 2016 Official Statement, as shown in the screenshot above:
While the Arena Project was first developed as the home arena of the Nets, it has evolved into a multi-purpose venue hosting many types of entertainment events, such as concerts, college basketball, family entertainment, boxing, civic and cultural events, and, most recently, NHL hockey. The Arena averaged approximately 180 to 200 events each year since its opening in September 2012, which has increased to over 240 events with the addition of Islanders Home Games in 2015.Actually, the arena was always supposed to be a multi-purpose venue, because 44 home games won't cut it.