Brooklyn Arena’s Coming Winter
The $4 billion Atlantic Yards project, which includes the Frank Gehry-designed basketball arena for the Nets, is expected to break ground in December, but a perfect storm of problems could be right around the corner.
Developer Bruce Ratner’s plans include thousands of apartments and offices in 16 towers that would surround the arena. He is scrambling to secure a deal with state officials and the Metropolitan Transit Authority, which owns a section of land that would be used for the project, according to the New York Times.
But the winds of change are blowing. There’s a softened economy, rising costs, housing crises and opponents to the project. Ratner recently met with his bankers and David Stern, commissioner of the National Basketball Association, along with bond-rating agencies to discuss the proposed financing for the $950 million Barclays Center arena, the Times said.
But the Treasury Department has to sign off on Ratner’s use of tax-exempt bonds. If not, Ratner’s costs will increase dramatically. He also needs victory in court challenges to secure the funding, the Times reported.
And even with the Treasury Department casting a favorable decision on Ratner’s request, tax-exempt bonds are a tough sale in New York’s current real estate market, which has made investors and lenders wary of large-scale projects, according to the Times.
Ratner has asked government officials for as much as $100 million in additional cash for the project, citing rising costs and problems in the bond markets, two anonymous sources told the paper.
However, Charles Ratner, the CEO of Bruce Ratner’s parent company, Forest City Enterprises, told the Times the Atlantic Yards was the biggest project in the company’s pipeline and was confident “we can make it happen” in 2008.