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Atlantic Yards/Pacific Park infographics: what's built/what's coming/what's missing, who's responsible, + project FAQ/timeline (pinned post)

Owners hope for billion-dollar New York Liberty valuation. That bolsters the case for "additional rent" paid to public sector for using the (tax-exempt) Barclays Center.

The  WNBA's New York Liberty, which until last year's playoffs were selling tickets to the Barclays Center's lower bowl, sold out (17,735) the entire arena Saturday for their home opener, which featured the Indiana Fever and the star rookie Caitlin Clark. 

(The Fever still are weak, and the Liberty won easily.)

And, as NetsDaily recently reported, Clara Wu Tsai, who owns the team along with her husband Joe Tsai (and serves as its front person), recently told Harvard Business School’s New York alumni club that, as TV viewership grows, team valuations will rise over a decade, and the Liberty could become “the first billion dollar women’s sports franchise."

That would be quite a leap, but consider how the valuation of the New Jersey Nets, once $300 million upon the purchase by Bruce Ratner (and others) in 2004, inflated to more than $3 billion (with the arena company) by 2017, and now could be worth far more.

As NetsDaily reported, the Liberty purchase, from New York Knicks owner Jim Dolan, was "reportedly for the assumption of debt and a promise of shared future profits," and the team today could be worth about $200 million. So a billion-dollar valuation implies a five-fold leap.

Upside for the public?

A rising value for the Liberty bolsters the case for an additional contribution by the team owners to the public coffers.

As I wrote in March, the big winners so far in Atlantic Yards/Pacific Park have not been the master developers, Forest City Ratner and then Greenland USA, but the team owners: Mikhail Prokhorov, who bought the team and arena company from Ratner, and now the Tsais, especially since they are (reportedly) considering selling a slice of the team at a huge profit.

Though few remember, the possibility of greater public benefit was baked into an 2005 agreement, later ignored by public agencies and public officials.

If a second professional team arrived at Barclays, according to the February 2005 Memorandum of Understanding (MOU) signed by the city, state, and developer Forest City, "additional rent and other terms" would be negotiated.

After all, the arena operator has a tax-exempt site, with PILOTs (payments in lieu of taxes) diverted to pay off arena construction, via tax-exempt bonds, which have a lower interest rate.

But that document was nonbinding, and no such clause was in the later guiding Development Agreement that Forest City signed with Empire State Development Corporation (now known as Empire State Development), the state authority that oversees/shepherds the project.

So neither state officials nor elected officials brought it up when in 2015, the New York Islanders moved to Brooklyn, with a purportedly "ironclad" 25-year lease. (As it turned out, there was a three-year opt-out clause.)

Revisiting the Liberty

Nor was the issue raised when the Tsais bought the WNBA’s New York Liberty in 2019 and a year later moved them to Brooklyn. 

Just two months ago, I acknowledged that the Liberty’s shorter season, lower ticket prices, and generally lower revenue do not double the Nets’ fiscal presence. (That correlates with a lower team value.) But the arena is an ever more valuable canvas for advertising and marketing, even as promises of low-cost Nets tickets lasted just one year.

Given the new fiscal ambitions, we can ask: if the arena, enabling their presence in Brooklyn, helps the Liberty valuation boom, why shouldn’t the public get a slice of the upside?

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