Investors Eat Up Atlantic Yards Arena Bonds
Despite long-time public opposition and more recent financial challenges, Forest City Ratner had no problem raising $511 million, roughly half of what he needs, to finance the development of the arena at Atlantic Yards yesterday; the bond sale narrowly beat the end-of-year deadline for tax-free financing for the project. There was a strong appetite for…
Despite long-time public opposition and more recent financial challenges, Forest City Ratner had no problem raising $511 million, roughly half of what he needs, to finance the development of the arena at Atlantic Yards yesterday; the bond sale narrowly beat the end-of-year deadline for tax-free financing for the project. There was a strong appetite for the bonds, said Jay Abrams, a bond analyst at FMS Bonds. The market was comfortable with the ratings the deal received and the security that was pledged. Not every felt quite as sanguine, however. These bonds went on the market without any oversight from any state officials, said Daniel Goldstein, spokesman for Develop Don’t Destroy Brooklyn, the main Atlantic Yards opposition group. The state will be on the hook if the project defaults. The Brooklyn Paper had a good summary of how the rest of the financing breaks down:
– $511 million from yesterday’s tax-free bond sale
– $100 million in taxable bonds yet to be sold
– $293.4 million in equity from Mikhail Prokhorov pending NBA approval
– $156.4 million from the city
– $104.3 million from the state
$500 Million in Bonds Sold in 2 Hours for Nets’ Arena [NY Times]
Ratner Sells $511 Million in Tax-Free Bonds [NY Daily News]
Ratner’s tax-free bonds are snapped up fast [Brooklyn Paper]
Investors Grab Up Brooklyn Arena Bonds [NY1]
Junk Yard Bonds Get Trashed [Brownstoner]
Photo by Willets Point United
“It seems that this time brikenny and bxgirl have better info and a better understanding both of what happened.”
Really because brikenny said:
“there are parcels of land owned by FCR that they already acquired for next to nothing prices through eminent domain that will be bought AGAIN by the state (at current market value) from FCR and leased back.”
and that is factually and completly WRONG – FCR acquired NOTHING through ED, and the land they did acquire they will sell to the ESDC for $1 – NOT fairmarket value, so I think you better go back a check YOUR facts.
As to why they are doing the leaseback – I dont fully know, I beleive it has to do with 1. avoiding certain state approvals 2. maybe relevant to the ED hearings….
But what I do KNOW is Ratner bought the land/property at a high price and WILL NOT be compensated for it by the State/City – despite the FUD that NIMBYs like bikenny want to spread.
fsrg- I live not far from there and in fact one of the buses I regularly take goes right through so actually I do know and have seen first hand what has happened.
The street was not running through the arena. It was going to be enclosed in a courtyard of his housing complex. The hole in the ground is an active railyard. It may not be pretty, but it is functional- that hardly amounts to blight unless you also think powerplants, the BQE and a working waterfront are ugly.
But you stilll haven’t answered my question of why the $1.00 back and forth?
Ah yes, as expected another AY thread has morped into the same old fight again. Can we just shelve all this please? This is happening, we know who likes it and who doesn’t, end of.
Let’s move on to the only interesting thing to come up in this thread, the Harris/Wall question!
fsrq – you misunderstand how the city owns property and how the city can sell it or lease it to others. If you did, you would be quick to see how established precedent and public process was brushed aside by this particular deal. It seems that this time brikenny and bxgirl have better info and a better understanding both of what happened.
Sorry, but whatever you think of Ratner as a superdeveloper (and I’ve got to say that as urban design, FCR’s stuff is pretty awful – maybe it looks better on a balance sheet,) you have to admit that this deal stinks for the city, taxpayers, and people in the areas that will be impacted by the development.
you or i can play with devin harris in the backcourt if you add lbj and bosh to the mix!
And the “area” was NOT up and coming….because there was a HOLE in the middle of it and a horrendously ugly street abutting the HOLE….A few buildings on the fringe of Park slope and Prospect Heights were able to be developed because the properties were able to be acquired cheap and despite the overall HORRIBLE location, the insane RE bubble especially in these neighborhoods allowed a few buildings to be converted into housing….the area was not and could not ever “thrive” because again….it has a HOLE in the middle of it. [Come on BxGrl, you know this, please do not buy into the insane argument that somehow left on its own, this area (the general AY footprint) was going to develop into anything….it has been a blight (pun intended) for far longer than any of our lifetimes.}
The city is not “giving away” anything – it SOLD the land for fair market value except for the portion directly under the arena – and I am speculating here because I wasnt in the room, but they probably gave the portion of the street under the arena for $1 – because you cant have an arena with a street running through it. And BTW – ALL the land will be owned by ESDC
Translation for the relevant portion (iv) – Ratner bought tons of properties in the footprint (at highly inflated values) – he then sells it to ESDC for $1 and then leases it back for $1 – the sale and lease back is a wash so Ratner bought the property (at highly inflated prices) and DOES not recoop the money for the purchase.
– Also note, the land that ESDC aquires through ED must be paid for by FSRC (although they can consider using a portion of the Cities capital contribution money as well (but mind you that does NOT increase the cities contribution, just moves the money around if they even do it)
ok- translation please. And how is the city giving away public streets?
fsrg- I was referrign to the ed and re-leasing back to ratner but while some blocks were not pretty, there was a lot happening and Goldstein’s building is a perfect example of the burgeoning interest in the area. Nor was it the only building that was renovated into uspcale apartments. The area was up and coming- and now it’s not, brought to a screeching halt by Ratner.