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
brikenny – that is so ridiculous….just cause someone has a “plan” does not mean that it is viable or beneficial. Even the so called “Extell-Unity” plan was a joke and had no financial chance to be completed (see Extells failed projects in Manhattan to see what AY would be).
It costs billions to fix and then build over the railyards – this is critical infrastructure, you can just go for the highest bid, or the plan that the immediate 4 blocks wants…Ratner is the ONLY credible developer to put forth a credible and ‘possible’ plan in the last 3 decades.
bxgrl…
Sadly, 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. The triangular block where PC Richards now stands is also slated for seizure. When Ratner was on the board for BAM he engineered the sale of that parking lot to himself for approximately $250,000. He has included it in the “footprint” of this project so that he can A) void his long-term leases with the 2 stores on the block, and B) Build much taller than city zoning would allow as the plot would then fall under the control of the ESDC.
And bkn4life is also correct about the appellate court ruling. Worse yet, the majority of the lots cited as “blight” was owned by FCR, the state, or the city. AS several lawyers familiar with eminent domain law have said, never before have they seen a case where the non-blighted properties abutting the blight were given over to those who owned or created the blight.
Glad that smeyer brought up Brooklyn Speaks – and there was an alternative plan put together (folks from Pratt were very much involved) that, through a number of community meetings, came up with a site plan for the area that did not split the neighborhoods in half and was much more neighborhood/user friendly – but, as other posts note, AY always seemed to be a done deal the Ratner way.
The direct and indirect taxpayer subsidies for AY are diegusting. Just what the neighborhood needs – a Russian Billionaire owned team, a huge parking lot, and empty promises from the developer
I agree with havelc
Do not take DDB seriously. They have been misinforming the public from the beginning. And if anyone hasnt noticed, everyone who was living in the footprint of the arean (except for the 2 nuckleheads who decided to stay and jeopardize their health and lives of family members) all benefitted financially from Ratner. They are living a much better quality of life which what we all strive for.
Who would go to a sports arena in Brooklyn?? Everyone, of course. If you build it they will come!!! And when there arent games, there will be music! and shows! Who doesnt want to see this for the community. Gentrification is not a bad word, especially when the entire community benefits. And just for those DDDB people, that area where the arena will stand very soon, was once a have for prostitures, druggies, and shootings, for many years. No one wanted to put their monies into that area because it was such a bad neighborhood. No One! Once the neighborhood started to turn into a friendly neighborhood community, it was time to build…. Build an arean, building something instead of the empty blighted lot that stood naked for years!! Go away DDDB your voice isnt big anymore. No one is listening. The arena will be built and this will be a better neighborhood for EVERYONE>
Bxgirl FCR did this so they can also short circuit the City’s land use rules which are being waived by the state. He is being paid for the land but he can also do whatever the state agrees to let him build. City land use rules be damned.
The City(in the guise of the Mayor) agreed to this. There has never been a vote by the City Council on this separately. The City did contribute some money but that was part of the budget and the City Council has limited right to change the Mayor’s budget. Its normally only an up and down vote. there is some give and take between the Mayor and the City Council but the Mayor has all the cards. the Mayor agreed to donate some city streets to it as well but again this short circuited the city’s land use process which if the city sold the streets to the state would require City Council approval but since the State took the streets by eminent domain no vote was necessary.
Far more than sad, bkn4life.
bxgirl…
that was an issue the appellate court slimed up.
with a wave of a semantic hand… you can now steal from the poor to give to the rich.
there was oral arguments in the appellate division(monroe place) where someone trotted out the “you cant evict poor to build for the non-poor using state $$ law.”
decision kinda gutted that one. now you can pay a private developer to buy up property with state money… as long as there is one level of indirecton between the state and the act.
sad.
basketball – yes! and music events double triple yes!
the basketball games on TV showing an NBA team and all these people in the stands to everyone in the country will create an entirely different perspective about Brooklyn.
i think this is a major major boost to all owners in Brooklyn.
“Few people even realize that ALL of the land Bruce Ratner/FCR already owns in the project’s footprint will be bought from him at a huge profit under Eminent Domain, and leased back to him for $1 a year (that part WAS made public).”
brikenny- is this accurate? The state is buying the land he owns from him through eminent domain and then leasing it back to him? That is completely outrageous and disgusting.