SEC Filing Warns Non-Arena Portions Of Atlantic Yards Could Experience Delays
Documents filed last week with the SEC by Atlantic Yards developer Forest City Ratner "warn that the non-arena portions of the plan could experience 'further delays' leading to most or all of the rest of the 22-acre, $4.9 million project being scrapped," according to Rich Calder of the N.Y. POST. Risks to investors cited in the SEC filings include the "potential of rising construction costs and financing rates, loss of arena sponsorships and inability to meet government-approved construction deadlines." The filings indicated Forest City Chair & CEO Bruce Ratner and the company could potentially lose $525M on the project, "excluding any potential write-offs for the arena" and "liquidated damages." Forest City "reported 'record' earnings the past year ending Jan. 31, in part fueled by selling Russian billionaire Mikhail Prokhorov a majority interest in the money-losing New Jersey Nets, who will move to the Barclays Center arena for the 2012-13 NBA season." The filings also revealed that the Prokhorov deal in May was a "greater financial windfall for Ratner than what was announced publicly." Prokhorov "paid Ratner $223 million for 80 percent of the Nets and 45 percent of the arena, and agreed to pay for $60 million in team losses and assume 80 percent of the Nets' $200 million debt." Both parties had claimed the deal was for $200M and other "funding commitments" (N.Y. POST, 4/4). The WALL STREET JOURNAL's Eliot Brown reports Forest City "has been struggling to raise money for the housing that will accompany" Barclays Center, which is "dwarfed by the nearly $4 billion in housing and retail space Forest City wants to construct there in future years" (WALL STREET JOURNAL, 4/4).
OPENING DATE SET: Nets CEO Brett Yormark indicated that Barclays Center will open Sept. 28, 2012, capping a "three-week run of soft openings tied to open houses and community events." SPORTSBUSINESS JOURNAL's Don Muret reports the opening event "should be announced in the next 30 days." Nets Sports & Entertainment as of last week "had 149 dates confirmed for Barclays Center's first year of operation" (SPORTSBUSINESS JOURNAL, 4/4 issue).