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September 23, 2009

Nets Will Have New Owner; FCR Will Have New AY Partner

Wow! Russia's richest man, Mikhail Prokhorov, announced a deal with Forest City Ratner and the Nets that will make Prokhorov's Onexim Group the majority owner of the Nets and an Atlantic Yards development partner. Details from the AP: "According to the agreement, entities to be formed by Onexim Group will invest $200 million and make certain funding commitments to acquire 80 percent of the NBA team, 45 percent of the arena project and the right to purchase up to 20 percent of the Atlantic Yards Development Company, which will develop the non-arena real estate." The deal still needs to be approved by the NBA. AY Report has details on Develop Don't Destroy's reaction to the news.
NJ Nets, Russia's richest man agree to deal [AP via Yahoo]
Russian Tycoon Investing $200M to Bridge Financing Gap [AY Report]
NBA and Treasury Department Must Vet Billionaire [DDDB]
Photo from Impactlab

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Comments

I wonder what The What thinks about this. no doubt he'll hijack brownstoners thread and post it on his blog.

Posted by: daveinbedstuy at September 23, 2009 2:46 PM

Ooh - Maybe the nets will make a push for Lebron

Is Jigga still affiliated with the Nets?

Posted by: dirty_hipster at September 23, 2009 2:47 PM

Is there another picture of this guy somewhere that can be used?
What about his facebook pics.

80%
45%
20%
That's a lot.

Posted by: Re Writer at September 23, 2009 2:50 PM

This is huge! This news will steamroll the project and talks of Lebron are around the corner! Particularly how Lebron wants to be a billionaire, and the potential of being the global face of basketball must have him salivating.

Posted by: ReMiXxd at September 23, 2009 2:54 PM

will NBA approve this?

Posted by: chrishavens at September 23, 2009 2:59 PM

throw $ at the nba... it will get approved

Posted by: guikazoid at September 23, 2009 3:03 PM

NBA will definitely approve. Stern has already hailed the agreement. The marketing potential of a) a sports team in Brooklyn and b) the NBA in Russia, will be too hard to pass up.

Posted by: Brokedeveloper at September 23, 2009 3:07 PM

David Stern has an inferiority complex.

Not 100% sure, but I think no other North American Big 4 teams are foreign-owned.

Posted by: infinitejester at September 23, 2009 3:07 PM

Why would the NBA be against this? They have been all about globalization since Yao Ming, Dirk and other foreign players have come into the league.

This is win-win for all sides.

Posted by: dirty_hipster at September 23, 2009 3:09 PM

I heard the Chinese are going to buy the Giants.

Posted by: daveinbedstuy at September 23, 2009 3:10 PM

David Stern "praised" the move....but it still needs to be approved by the NBA board of governors...

all the pieces are in place; MTA, Bloomberg, cheap money, David Stern.....now a Billionaire that can wait out any further opposition (if any).

Arena is done, count on it.

Posted by: moreteasir at September 23, 2009 3:11 PM

Awesome, let's bring scary billionaire Russian oligarchs into the mix. Yay!

Posted by: crazypants at September 23, 2009 3:18 PM

Well the Mariners for sure were owned by Nintendo at one time.

Arena=D O N E - D E A L

Now maybe someone in the "opposition" will wake up and try to help make sure we get the best arena (no parking) instead of fighting for everything - and get nothing.

Posted by: fsrg at September 23, 2009 3:20 PM

....I bet the NBA marketing execs are salivating. At least now they'll have their own identity. Playing opposite the Knicks in NY and shaking the NJ dust off would have been tough to do.

Posted by: moreteasir at September 23, 2009 3:24 PM

Two words: Russian cheerleaders!

Posted by: infinitejester at September 23, 2009 3:29 PM

He's kind of young to be so rich.
I see nothing good coming from this.

Posted by: Minard Lafever at September 23, 2009 3:30 PM

What does youth have to do with wealth?!

Posted by: A CrownHeightsLady at September 23, 2009 3:35 PM

"What does youth have to do with wealth?!"

The more money one has, the more youths he can buy.

Posted by: Biff Champion at September 23, 2009 3:38 PM

He has a creepy 'widow's peak' look like he got a bad 'shape up' from the barber

Posted by: dirty_hipster at September 23, 2009 3:39 PM

Those Red uniforms were pretty omnious....

From Wikipedia: The 'Red Army' name refers to the traditional color of the workers' movement. This represents, symbolically, the blood shed by the working class in its struggling against capitalism, and the belief that all people are equal.

...sums up the yahoos in Brooklyn perfectly.

Posted by: moreteasir at September 23, 2009 3:39 PM

If I had money that needed, shall we say, a little cleaning up, a suite of cash-heavy businesses like parking and concessions could be very attractive.

Posted by: DitmasSnark at September 23, 2009 3:44 PM

Awesome news! Bring it on!

"New Arena Draws Russian New Money to Fort Greene - Clinton Hill, Brownstones Now Sell for $5mm!" NYT, June 2013

Posted by: DoubleBlackDiamond at September 23, 2009 3:47 PM

so what's the story with this guy? Did he inherit the money from his gangster father or grandfather? How could this moscow preppy have made billions? He looks like he should be running for city council.

Posted by: Minard Lafever at September 23, 2009 3:49 PM

In Soviet Russia, Brownstones sell you!

Posted by: moreteasir at September 23, 2009 3:55 PM

Minard Lafever....this is just for you!

Mikhail Prokhorov

Mikhail ProkhorovMikhail Prokhorov (born May 3, 1965) is a Russian self-made billionaire and oligarch. After graduation from Moscow Finance Institute he made his name in the financial sector and went on to become one of Russia's leading industrialists in the precious metals sector. He is the former chairman of Norilsk Nickel, the world's largest producer of nickel and palladium, and the current chairman of Polyus Gold, Russia's largest gold producer.

Prokhorov is currently the richest man in Russia and the 40th richest man in the world according to the 2009 Forbes list with an estimated fortune of $9.5 billion.[1]

In May 2007, Prokohorov launched a $17 billion private investment fund, Onexim Group, focused on the development of nanotechnology, including hydrogen fuel cells, as well as other high-technology projects and non-ferrous and precious metals mining. One of the key areas of development is the production of materials with ultra–tiny structures used in energy generation and medicine.

Posted by: A CrownHeightsLady at September 23, 2009 3:55 PM

Cool, I'm younger than him. I still have a bit of time to amass my empire.

*Wringing hands together*
MWAHAHAHAHAHAHAHAHAHA!!!

Posted by: Biff Champion at September 23, 2009 4:07 PM

So reading btw the lines of the wiki bio - in 1989 when the Soviet era came to an end a 24 year old Russian boy appeared out of nowhere and w/ who knows how many millions/billions of dollars purchased a big chunk of what was the USSR's mineral rights and operations.

How does a Soviet (they were communists, remember, nobody owned property or held huge assets), much less a 24 year old, just happen to have a fortune at the ready to even bid on, much less buy up all the precious metals in the formoer USSR?

You know, what, never mind - I don't want to know.

scary..scary shenanigans are behind oligarch fortunes).

Posted by: crazypants at September 23, 2009 4:08 PM

ok so the same Onexim group that supposed to be "focused on the development of nanotechnology, including hydrogen fuel cells, as well as other high-technology projects and non-ferrous and precious metals mining" just bought a majority stake in the Nets....

Who said fishy...I didn't say fishy. What's fishy?

Posted by: moreteasir at September 23, 2009 4:11 PM

crazypants and moreteasir, you like to ask many questions.

Would you mind stepping into the back room with Boris for a quick "discussion".

Posted by: Biff Champion at September 23, 2009 4:13 PM

LOL

Posted by: A CrownHeightsLady at September 23, 2009 4:15 PM

"Two words: Russian cheerleaders!"

One Word: Hairy

Posted by: Re Writer at September 23, 2009 4:19 PM

my word, biff. You even look a little like him. Wait.....I thought you were Canadian?

Posted by: bxgrl at September 23, 2009 4:23 PM

Best thread ever.

Posted by: jland at September 23, 2009 4:26 PM

"my word, biff. You even look a little like him. Wait.....I thought you were Canadian?"

bxgrl, my paternal grandfather was from St. Petersburg. Who knows, Mikhail and I could be cousins! If only I could get written into his will.

Posted by: Biff Champion at September 23, 2009 4:36 PM

A long BusinessWeek article on the breakup of Norilsk Nickel, which is how Prokhorov walked away with approx $8bn cash a couple years ago:

"The war of the four oligarchs: Mikhail was selling to Oleg. Now Vladimir wants him to sell to Alisher. Tim Webb untangles the latest tale in the saga of Russia's metals moguls"
http://bit.ly/31op6

But @crazypants raised a good question: how did he come into his stake in Norilsk in the first place? The Wikipedia entry only says that he "engineered" it as head of a bank at the time (1993, when he would have been 28yrs old).

Posted by: steadyblogging at September 23, 2009 4:39 PM

He acquired his fortune the same way the Kennedy's acquired theirs

Posted by: fsrg at September 23, 2009 4:44 PM

If you are in favor of the AY Arena, this information is more troubling than reassuring. $200 million for 80% of the Nets AND 45% of the arena AND options on another 20% of the project? Bruce Ratner must be desperate for cash since he's selling all of this at a loss. Also; 2 billionaires who most other finance people wouldn't touch with a ten-foot pole developing this site? You can be guaranteed that the money-pit (which most analysts say this project will be) will turn into extortion of the state government when they both demand an infusion of cash to finish the project a couple of years into it (if history is our guide). If this project started honestly and openly there would have been VERY little opposition to it, but it started dirty, which was the principle objection, and the waters keep getting cloudier.

Posted by: brikenny at September 23, 2009 4:53 PM

Well this will bring a whole new dimension of posh to Brighton Beach. Can't wait to see his new house.

NY Times Real Estate Section, Sept. 2010:

"Mr. Prokhorov will build his "summer palace" in the section of Brooklyn formerly known as Mill Basin, but now known as Prokhorivshtello. all former residents of the area will be moved to trailers and will need to assist in the constructioin of the estate. They will thereafter be his serfs as part of a deal brokered by Czar Bloomberg I and Prokhorov"

Posted by: Minard Lafever at September 23, 2009 5:00 PM

I bet Corey Booker is crying somewhere...this news puts the nail in the coffin!

Posted by: StuyIvy at September 23, 2009 5:02 PM

Lebronski welcome to the Brooklyn/Moscow Nets where our water bottles are filled with Vodka and the half time snack is black market caviar!

Posted by: AndYouWillKnowUsbyTheTrailofRenters at September 23, 2009 5:03 PM

I went and read DDDB statement about this - and it of course confirmed my prior belief that Dan Goldstein is an a$$hole of biblical proportion....

Now I am not naive, and I am sure that virtually every Russian oligarch has some shaddy dealings in his past - but to put out a press release within hours of the announcement (meaning no credible research beyond wikipedia could possibly have been done) basically calling the guy a corrupt pimp seems a little over the top (and mostly irrelevant btw)

Not to mention he makes some crazy accusation of him being involved in organized crime b/c he owns 18% of a company, controlled by ANOTHER oligarch(Deripaska), that has been accused of possibly having organized crime ties.
- (it would be like me saying Dan Goldstein is involved in drugs because Heath Ledger was involved with DDDB and he died using drugs)

again, this russian may be the second coming of J. Stalin but it wouldnt matter if he was Jesus Christ himself - as long as he is for an Arena at AY - Dan Goldstein will say anything and do anything to slander, throw FUD and otherwise destroy him and anyone else on his own personal jihad to "save Brooklyn" (or is it to give his otherwise empty life meaning???)
.

Posted by: fsrg at September 23, 2009 5:17 PM

Make this insanity stop. I would love to see this criminal back out of the deal at the last minute and leave FCR in bankruptcy.

Posted by: FatLenny at September 23, 2009 5:28 PM

SIGN LEBRON NOW!!

Posted by: FtGreeneCorey at September 23, 2009 5:42 PM

"You can be guaranteed that the money-pit (which most analysts say this project will be) will turn into extortion of the state government"

Turn into?

Posted by: Sparafucile at September 23, 2009 5:46 PM

Most of the Russian Oligarchs (Roman Abramovich, Oleg Deripaska, Mikhail Prokhorov, Vladimir Potanin and Vitaly Malkin) have similar backgrounds: They are all politically connected to Putin (except for Mikhail Khodorkovsky, but that's a whole different store), are Jewish, each "appeared" out of nowhere in the early-to-mid 90's (with no prior involvement in business or politics), and were thrust to the helm of various State-Owned conglomerates, and all profited handsomely when those enterprises were "privatized".

Posted by: FtGreeneCorey at September 23, 2009 5:47 PM

....looks like "big brother" Brownstoner censored my prior post, so I'll try it again, "editing" myself. Daniel Goldstein is a scumbag (before a called him another kind of bag which rhymes with rouche). Clearly now, DDDB will be dedicated to smearing Prokhorov's name, and when that doesn't work and the deal get approved by the NBA and the Treasury Department, Goldstein will focus on smearing David Stern and (US Treasury Secretary) Tim Geithner ("Stern and Geithner are clearly corrupt...75% of Mr. Stern's league recreationally abuse illegal drugs, and Mr. Geither was guilty of tax evasion..."). Goldstein is playing a dangerous game and making from powerful enemies in the process. Good luck with that one...

Posted by: FtGreeneCorey at September 23, 2009 5:54 PM

Time to change the name of the team to the "Brooklyn Netski's". Hopefully Prokhorov spends dough on the squad the way Abromovich did in England with "Chekski". How about Chris Paul at point guard, Dwayne Wade at 2 guard, Lebron at Small Forward, Amare Stoudemire at Power Forward and Dwight Howard at Center...now that's a squad!

Posted by: FtGreeneCorey at September 23, 2009 6:01 PM

The New Jersey Nyets?

Posted by: TownhouseLady at September 23, 2009 6:28 PM

Well played, THL!

Posted by: DitmasSnark at September 23, 2009 6:41 PM

I, too, read the DDDB press release and found it to be the most unhinged, insane rambling to date, no small feat when you're dealing with Daniel Goldstein. He and his cronies have always been desperate, but this release is in a category all its own. I got a huge belly laugh out of the phrase "major court challenge".

This deal conclusively eradicates any financial problems for the project and in a few short months, the eminent domain case will also be history. Dan, pack your family and move upstate (where you probably already live).

Posted by: Big Jugs at September 23, 2009 6:45 PM

And the winner is......"Brooklyn Nyets!"

Love the comments. Very funny thread.

In all seriousness this is great news. The arena is indeed a done deal. But for DDDB's frivolous lawsuits Brooklyn Nets basketball would have started this Nov. Sad. Three years of senseless delay for what purpose? Now we're looking at 2012 at the earliest. Blows!

Posted by: DoubleBlackDiamond at September 23, 2009 7:02 PM

I would like to see how the use of eminent domain can be justified for this arena project. There is blatantly no public purpose here and it is entirely separate from the balance of the plans for the site, both in terms of timing and ownership. So a US court is going to take property away from an American citizen so a Russian oligarch can build a basketball arena for the team he owns? Good luck with that one. This move places the arena project as completely unrelated to the balance of FCR's plans for the site and as, more than ever, a purely private business venture. In no way can you connect the two, and the new arena design does not include any form of public space whatsoever. Brooklyn Nyets indeed -- as in not gonna happen.

Posted by: babs at September 23, 2009 7:49 PM

So babs, you think the the New York Court of Appeals is gonna strike down at 4-0 unanimous decision in the lower courts SOLELY on the basis that Ratner entered into a non-binding letter of intent with a foreigner (damn those commie foreignors!) to invest in the arena, the team and the larger development? Good luck with THAT theory!

Posted by: FtGreeneCorey at September 23, 2009 8:53 PM

The Russians are coming the Russians are coming opps the Russians are here! the Russians are here. A shout out for the person who came up with the NY Nyets!

Posted by: smeyer418 at September 23, 2009 9:51 PM

BTW the Court of Appeals just over ruled the unanimous decision by the lower court in the Richard Ravitch Lt governor matter so it does happen(4 to 3)

Posted by: smeyer418 at September 23, 2009 9:53 PM

I never said that the Court of Appeals would not over rule the lower court decision. My point was that, to the extent they are predisposed to do so, it would NOT be because of Ratner's deal with Prokhorov.

Posted by: FtGreeneCorey at September 23, 2009 10:09 PM

I hope that russkie screws bruce to the wall.

Posted by: Ben Gazi at September 24, 2009 8:01 AM

LMMFAO!!!

Posted by: Joe from Brooklyn at September 24, 2009 8:51 AM

Corey just curious - what relevance is the religion of Russian Oligarchs to this debate or frankly almost any other????

Posted by: fsrg at September 24, 2009 9:25 AM

Yay! DDDB is finally SOL! Woo-Hoo to the world-class arena! Yeah, Lebron!

Posted by: bupe at September 24, 2009 10:01 AM

Not the only reason to overrule them but certainly a compelling argument that there is no public good in this arena project. When the Atlantic Yards project was all of a piece, to include affordable housing (whether this is truly affordable or not is, of course, another question), and the arena was supposed to have a public room, an argument could be made that there was a public component to it -- but now that it has been split into two separate projects, with different ownership, etc., there is no way that anyone could argue that a privately owned, pay arena serves the greater public good in any way. So maybe there should now be two separate eminent domain lawsuits here -- one covering the arena footprint and the other covering the rent stabilized buildings that Ratner wants taken by eminent domain (away from him, incidentally -- this whole scam is so dishonest it hurts) so he can evict those pesky rent stabilized tenants at last. And I see a no on both counts -- one because the arena is clearly not in the public interest, but a private, for-profit endeavor and the other because there is absolutely no fixed timeline for when and even if the other phases of this project are going ahead.

Posted by: babs at September 24, 2009 10:51 AM

Good luck DDDB in trying to derail what is now a Russian oligarch's vanity project. You should have worked with Ratner while you could. He at least needed to care about his image in the US and the economics of the project. Russian oligarchs aren't well known for taking "nyet" for an answer.

Posted by: solidago at September 24, 2009 11:15 AM

Brooklyn Speaks tried to work with ratner/ESDC they weren't listening at all. Even Marty and his reps started attending the Brooklyn Speaks meetings but the ESDC and Ratner had a deaf ear and blind eye to any discussions. They didn't want any input except from sycophants.

Posted by: smeyer418 at September 24, 2009 11:21 AM

The project has ALWAYS been a done deal. Ratner has always had Marty Fucking Markowitz in his pocket.

Posted by: Ppark at September 24, 2009 12:14 PM

Love the "Rubles for Clunkers" headline in today's Times.

Posted by: jland at September 24, 2009 12:33 PM

Ppark - except Marty Markowitz is a politician with essentially no power.

Posted by: fsrg at September 24, 2009 1:03 PM

« Development Watch: 808 Myrtle Avenue Closing Bell: The Writing on the Wall at 580 Carroll »

September 23, 2009

Nets Will Have New Owner; FCR Will Have New AY Partner

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