Posted by Matt Moore
The Nets are headed to Brooklyn in 2012, to begin what they hope is an ascent to relevance behind a relocation to the big city. And they'll have a building. Unfortunately, the rest of the swanky new digs they're supposed to be moving into probably won't be there. From the New York Post:
Documents filed last week with the Securities and Exchange Commission by developer Bruce Ratner and his Forest City Enterprises 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 billion project being scrapped.via New Jersey Nets ownership and Bruce Ratner cant deliver on Atlantic Yards plan promises according to SEC papers - NYPOST.com.
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.
"If any of the foregoing risks were to occur we may . . . not be able to develop Brooklyn Atlantic Yards to the extent intended or at all," according to one of the developers SEC filings.
Ratner and Forest City -- in a doomsday scenario -- could potentially lose $525 million on the project, "excluding any potential write-offs for the arena" and "liquidated damages," the filings say.
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.
Brooklyn Atlantic Yards was proposed and approved before the economic recession hit, before the real estate crash, before the landscape of development shifted. Now, after pushing through a hardfought neighborhood association effort to block the building of the arena along with navigating difficult political waters, most of the construction won't be completed in time, if at all. The neighborhood groups have to be thrilled with that news.
What's more, it lends to the continuing public perception that the Nets will always be second place to the Knicks. While the Knicks play in the World's Most Famous Arena, the Nets are moving into a "potentially" non-descript arena in Brooklyn. Whether fair or not, that will be the perception sold.
But of course, it's still a new building, which is the important thing, in New York, which is the more important thing. This is still a no-lose for Barclays and Prokhorov, and the shopping malls and Dippin' Dots courtyards can be completed at a later date. But the future of the Nets as a franchise remains very much unclear both on and off the court.