Consultants hired by New York City's Economic Development Corp. say an NBA arena in Brooklyn will be viable, and the city's contribution to the building costs can be paid off through tax revenue generated by the development.
Turnkey Sports, a Washington, D.C.-based sports advisory firm, and ERA, a New York real estate consulting group, are working together to advise the city on sports facility plans, including the Brooklyn arena and a new stadium for the Jets in Manhattan.
They found that although the proposed Nets arena in Brooklyn will compete with New York's Madison Square Garden, and the lack of a hockey team will make for some challenging economic scenarios, there is still precedent for such an arena being able to thrive.
"We project the arena will be successful and operate in the black," said Len Perna, CEO of Turnkey Sports. "We think it's a good project. We think it's innovative and well thought out. We've been pretty positive in our advice to the city."
The arena would be the linchpin of a $2.5 billion real estate project that developer Bruce Ratner is attempting to bring to downtown Brooklyn. Ratner's bid of $300 million to buy the Nets was accepted by the Nets' principals last week (see "Mounting short-term losses a hurdle in sale of Nets to Ratner ").
Perna said his company based its analysis primarily on comparisons to other arenas that are the secondary indoor sports facility in their markets, such as the Wachovia Spectrum in Philadelphia, Arrowhead Pond in Anaheim and Allstate Arena in the Chicago area.
ERA and Turnkey project that the Nets will have paid attendance of 15,626 patrons per game, and that the arena will book about 200 events a year by adding an arena football or indoor soccer team. The Nets now average 14,158 a game, which includes free and discounted tickets.
Jonathan Fair, the city executive who hired ERA/Turnkey, acknowledged that other businesses in outer-lying boroughs have met difficulty when trying to attract dollars from Manhattan, but said he thinks things will be different for an NBA team.
"Getting people to cross the river has proven to be difficult in certain instances," he said. "But we've seen a revitalization in downtown Brooklyn generally over the last 15 years. [The arena will be near] the third-largest transit hub in the city. There couldn't be an easier place to get to."
