Nets Arena Scores Funding

After years mired in legal and financial setbacks, the pace is finally picking up for the developer of the proposed Barclays Arena in New York City, which has secured top-dollar investments from a Russian billionaire and a recent bond sale.

Billionaire Mikhail Prokhorov’s Onexim Group announced in September that it would invest $200 million to acquire 45 percent of the Barclays project and 80 percent of the New Jersey Nets, which will reside in the building.

Prokhorov reportedly signed formal contracts on the deal Dec. 15, making him the principal owner of the team and a key investor in the arena project, a cornerstone of Forest City Ratner’s Atlantic Yards development in Brooklyn.

“I am looking forward to working with Bruce and his team to bring a world-class entertainment and sports center to the heart of New York City,” Prokhorov said in a statement. “Brooklyn is an exceptionally attractive market for a new arena and the Barclays Center will provide a fantastic home for the Nets.”

Forest City Ratner head Bruce Ratner purchased the Nets in 2004 with plans to move the team to the borough and spur the development.

However, the arena at times seemed destined for failure as challenge after challenge was presented by Develop Don’t Destroy Brooklyn, a community group opposed to the use of eminent domain to secure land for the project.

A New York court of appeals ruled last month that the state was justified in handing over the land to Forest City.

The ruling, along with Prokhorov’s investment and the reported sale of $511 million in tax-exempt bonds Dec. 15, should inject new life into the project.

“There was a strong appetite for the bonds,” FMS Bonds analyst Jay Abrams told the New York Times. “The market was comfortable with the ratings the deal received and the security that was pledged.”

The developer will raise the remainder of the funds for the project privately, the paper said. The arena naming rights agreement with Barclays, which was set to expire at the end of 2008, has apparently been extended at a reduced price.