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"No sleep till' Brooklyn" for Nets?

Discussion in 'NBA Dish' started by tigereye, Jul 23, 2003.

  1. tigereye

    tigereye Member

    Jun 23, 2002
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    Nets: Brooklyn proposed as home for Nets

    Wednesday, July 23, 2003

    Star-Ledger Staff

    Raymond Chambers, Newark's leading philanthropist, is making a push for an arena in the state's largest city where only the Devils would play.

    At the same time, his partner, Lewis Katz, is pursuing talks of his own to move the Nets to Brooklyn, according to four top executives and investors with YankeeNets, the sports company that controls the teams.

    Chambers declined comment and Katz didn't return repeated calls. If the talks are serious, it would be the first time YankeeNets has followed up on a threat to move at least one team out of state.

    Officials close to the two men say they continue to work together cordially despite the competing arena proposals. That leaves it unclear whether the Brooklyn project is more than a negotiating ploy to bring four years of talks in New Jersey to a conclusion.

    With Gov. James E. McGreevey's blessing, Newark has offered YankeeNets $210 million in public subsidies for the proposed $355 million arena. But the two sides have been unable to find a way to close the remaining $145 million gap.

    Richard Monteilh, Newark's business administrator, said Monday the city continued to do everything it could to reach a deal.

    "YankeeNets is working on a variety of options and alternatives," he said. "The city's costs are fixed. We're trying to revive downtown and create jobs."

    Associates of Chambers and YankeeNets officials said Katz is talking with Bruce Ratner, president of Forest City-Ratner Cos., about an arena above the Long Island Railroad terminal on Atlantic Avenue in Brooklyn.

    The proposed $500 million Brooklyn arena would include 5,500 housing units. The associates said Ratner has signed up the noted architect Frank Gehry to design the project, which would be financed with roughly $30 million a year in tax revenues collected at the site.

    Ratner could not be reached for comment.

    YankeeNets officials, who declined to be identified, said Ratner has also offered to buy the Nets. For now, they said, Katz and YankeeNets prefer to hold on to the franchise.

    The Brooklyn negotiations have forced Chambers to take on a prominent role in the proposed Newark project for the first time in nearly a year.

    His idea, though -- a Devils-only arena -- faces plenty of hurdles.

    The biggest obstacle is money, which the Devils lost a lot of this year -- some $25 million.

    Financing from banks would be far more difficult to get in a one-team arena. The city also may balk at providing $210 million in public subsidies unless both teams come. Finally, an exclusive home for the Devils would have to compete for concerts and family shows with Continental Airlines Arena, where the teams now play, just six miles away in East Rutherford.

    The state had planned to close Continental Airlines Arena if both teams moved to Newark.

    "We have heard the rumors about an arena for the Devils in Newark," said George Zoffinger, chief executive of the New Jersey Sports and Exposition Authority, the state agency that operates the Meadowlands. "Our objective is to keep both teams in New Jersey.

    "If it's only the Devils moving to Newark, I don't see how we can force a closure of the Continental Airlines Arena."

    Chambers and Katz together own a controlling interest in the Devils, which allows them to move the hockey team without the approval of the YankeeNets board.

    The board, though, has refused to spend money on the Newark project. Chambers' associates said he views an arena for the Devils as his last hope to revive Newark's ailing downtown.

    Newark officials said no consideration has been given to whether the city would continue to offer some $210 million in public subsidies for an arena without the Nets.

    Monteilh said Newark would "absolutely" prefer an arena with two teams. The city would have to rethink its investment if only one team comes and a competing building remains in the Meadowlands, he said.

    "I have not gotten that proposal yet," he said of the one-team arena plan. "That has not been the proposal to us so far."

    Investors in the two franchises desperately need a new arena. The value of the Devils has dropped a third since Chambers and Katz bought the team for $175 million in 2000. A modern arena could increases revenue by $20 million each year and boost the teams' values.

    YankeeNets executives and investors said the latest push for Newark is the clearest sign yet of turmoil at the highest levels of the company.

    In February, the YankeeNets board appointed investors Mort Olshan, Alan Landis and David Gerstein to a committee with the mission of bringing the meandering negotiations with Newark to a conclusion.

    Marc Ganis, a Chicago-based arena consultant, was hired to lead the negotiations. Business leaders in New Jersey, including Art Ryan, chief executive at Prudential, and Al Koeppe, chief executive of Public Service Electric & Gas, were enlisted to rally corporate support.

    In late spring, however, Katz approached developers in Brooklyn.

    At the time, the moves angered members of the negotiating committee, created tension between Katz and Chambers, and helped spark Chambers' return to the arena talks after nearly a year on the sidelines.

    Chambers' associates denied yesterday there was a rift between Chambers and Katz. The associates said Chambers understood the desire to seek alternative sites for the arena.

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