NJ not moving to NY for another year

As stated in the TRADING JEFFERSON thread awhile back,

From SI.com
Nets' move to Brooklyn on hold

NEW YORK (AP) -- Bruce Ratner's $4 billion dream for a new Brooklyn
will have to wait, at least until next year.

The New Jersey Nets owner and developer has been plagued by a string
of problems that have delayed his plans for a new NBA arena, office
towers and thousands of apartments in Brooklyn.

Ratner said a recent court ruling would delay the project by up to six
months, meaning the Nets won't move in until least 2011.
Groundbreaking has been pushed back until at least next year for the
arena, which will cost more than three times what Ratner paid for the
entire franchise. And the financial crisis has made it tougher to
raise money, potentially jeopardizing a lucrative naming rights deal
with Barclays Capital.

Ratner, who has fended off years of community resistance to his plans,
remains optimistic. "Let me clear," he said last month, "that the
project will go forward."

But financial experts and state and city officials who have heard the
developer's private pleas for more government aid say the failing
economy has created a far bleaker picture for Atlantic Yards.

Ratner is heavily dependent on a pending federal decision that could
determine whether tax-exempt bonds can be used to finance the $950-
million arena. But even if the bonds become available, the seized-up
credit market could make it impossible to attract investors to the
arena, financial experts say.

"It's got more of an economic stall than a political or a legal
stall," said Michael Rowe, a sports management expert and former
president of the Nets. "I think he missed the curve on when that
project was financially viable and now he has to wait for it to come
back."

A leading critic of Atlantic Yards says the project is doomed.

"I think it's clear to everyone," said Daniel Goldstein of Develop
Don't Destroy Brooklyn, a residents' group suing to block the project.
"This is just merely a fantasy that they're going to build this
project. Yet they're moving forward as if everything's fine."

The downturn is threatening plans begun four years ago when Ratner,
CEO of Forest City Ratner Cos., bought the Nets as a centerpiece of a
22-acre development on an old rail yard, industrial buildings and
homes in Brooklyn. The megaproject would include an 18,000-seat sports
and entertainment arena, 16 skyscrapers with hotel, office and retail
space, 6,400 apartments and eight acres of open space.

Neighborhood groups vehemently protested, saying it would drive out
middle-class residents and overwhelm the area with traffic jams and
congestion. They have two lawsuits pending, including one challenging
the state's right to use eminent domain to take over more than a dozen
properties.

A groundbreaking for the arena had been planned for December, but was
delayed by a ruling last month in favor of the residents in that
lawsuit.

Building has not started on any of the signature projects, and Ratner
said earlier this year that the largest skyscraper -- Frank Gehry's
"Miss Brooklyn" tower -- wouldn't begin construction until an anchor
tenant is secured.

The arena's financing depends largely on the ability to issue up to
$800 million in tax-exempt bonds.

The Internal Revenue Service in 2006 proposed tightening the
regulations of tax-exempt bonds to severely limit their use to pay for
sports stadiums. A final decision, which could affect the arena as
well as the bonds used to build stadiums for the Yankees and the Mets,
is still pending. An IRS spokesman wouldn't say when a ruling is
expected.

Goldman Sachs Group Inc., the lead bond underwriter for Atlantic
Yards, declined comment on prospects for the arena financing. Barclays
Capital, which signed to a $400 million deal to name the arena the
Barclays Center, remains committed to the project, spokesman Brandon
Ashcraft said.

But parts of that deal are contingent upon the timing of the arena's
construction.

So is aid from New York City; the city and state each have contributed
$100 million in subsidies, with penalties attached if Atlantic Yards
doesn't complete the first phase of the project on a set schedule.

Ratner has appealed to government officials, citing the difficulties
of financing the project in a downturn, but no more help has been
promised.

"Without relief from the IRS, the project will be significantly more
expensive, and even more challenging," said Janel Patterson,
spokeswoman for the city's Economic Development Corporation. "But we
all remain committed to seeing the project move forward."

Even a favorable ruling that would allow Ratner to sell bonds for the
arena may not help in an economy where investors are wary of large-
scale projects with uncertain completion dates, bond and sports
finance experts said.

"In this credit climate, it's going to be very challenging," said Marc
Ganis, a sports finance expert in Chicago, though he and others think
Ratner will eventually succeed. "It's made lending far more
challenging and far more expensive, at least in the sports industry."

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Grimm-WJD