The Real Deal New York

Investors urge Ratner to ditch Brooklyn for Newark arena

April 25, 2008 07:14PM
By David Jones

Developer Bruce Ratner has been approached by several New Jersey
investors and public officials on a plan to relocate the Nets to the
Prudential Center in downtown Newark, according to sources familiar
with the talks.

The investors would like Ratner to have the Nets partner with the New
Jersey Devils and move into the Prudential Center in Newark, where the
hockey team has just finished its first full season.

“They’re being wooed politically as well as by the private sector,”
said Ken Baris, a West Orange, New Jersey-based realtor, who is familiar with some of the
investors who have approached Ratner. “There’s a lot of people that
kind of want to keep it quiet, but [at the same time] are looking
forward to a lot more leaks.”

A move to Newark would effectively end Ratner’s efforts to move the
Nets to a proposed $950 million Barclays Center in downtown Brooklyn, which was
to serve as the centerpiece of his controversial $4 billion Atlantic
Yards complex and would be the most expensive basketball arena in the
country. Nets officials denied there have been any plans to move to
Newark and have insisted they are moving forward with the Brooklyn
arena.

“The Nets are moving to Brooklyn, period,” said Barry Baum, a
spokesman for Forest City Ratner who handles the Nets.

Still, sources say the discussions have life.

Since the October opening of the Prudential Center, Newark officials
have urged New Jersey Governor, Jon Corzine, to shut down the Izod
Center in East Rutherford, where the Nets have played since 1981.

After failing to make the playoffs and trading its star player, Jason
Kidd, the Nets are expected to lose more than $40 million for the
2007-2008 season. They currently plan to stay at the Izod Center for
at least another two seasons.

“If they don’t get that arena built in Brooklyn in the next couple of
years, I’m doubtful that Ratner would want to keep paying for losses
for the Nets,” said Michael Cramer, professor of sports management at
New York University. “It would have been good to get the Nets and
Devils in the same arena.”

Baum said, however, that the Nets are set to announce new corporate
partners in May for luxury suites at the proposed Barclays arena, and
are working to sell season tickets and corporate sponsors at the Izod
Center for the remaining two years at that site.

New Jersey Devils owner Jeff Van der Beek declined to comment on the
Nets. But, he said, the arena is doing much better than “our wildest
expectations.” He said the Devils were averaging about 16,000 fans a
game and that the arena would average about 175 event nights in its
first year. He said he hoped that the number of events would climb to
225 per year in the future.

Essex County Executive Joseph DiVincenzo wants the Nets to join the
Devils in Newark, and has publicly questioned claims by the New Jersey
Sports and Exposition Authority that the arena can turn a profit with
no hockey team and limited public transportation.

“We would welcome the Nets with open arms,” DiVincenzo told The Real
Deal
. “If anything could be negotiated I think it would be great.”
A provision in the Nets lease with the NJSEA calls for a $12 million
penalty if the Nets move to another arena outside of Brooklyn or
Queens, however the Star Ledger reported earlier this week that
officials might be willing to waive the penalty.

Ratner told the New York Times in March that he would not be able to
finance the full 16 building Atlantic Yards project for several years
due to a weak financing environment and the inability to find an
anchor tenant for the Miss Brooklyn office tower. However, he said,
that he would move ahead with the arena by the end of 2008.

Atlantic Yards opponents have petitioned the U.S. Supreme Court to hear their case and officials from Develop Don’t Destroy Brooklyn said they expect the court make a decision on whether to hear it by June.

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