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Will the Credit Crunch Mean No Brooklyn Nets?

By Mark

The ramifications of the continuing credit crunch the nation is enduring are being felt throughout the economy and the sports world is not immune. Earlier, I discussed how it impacted the English Premier League, but it is also being felt a little closer to home, just across the river from Wall Street to be more precise. The multi-billion dollar Atlantic Yards project in Brooklyn has as its centerpiece the Frank Gehry designed arena which is to be the new home of the now New Jersey, soon to be Brooklyn, Nets.

Today, Nets owner Bruce Ratner, the CEO of Forest City Ratner, the developer of Atlantic Yards, announced a delay in the development of the signature office tower and the three residential buildings at the heart of the $4 billion development. The current credit markets and the economic slowdown has made leasing a challenge and while Ratner pledges that the project is moving forward, delays like this one commonly lead to much quieter cancellations at a later date.

Today, Ratner pledged that construction of the arena would proceed on schedule, however, it is difficult to believe that it would actually happen on time when the balance of the project is in limbo. The arena was the effective loss leader for the entire development, although at $950 million and counting, it was perhaps the most expensive loss leader ever undertaken anywhere in the world.

Since the arena's footprint encompasses more than one block, eminent domain will be needed and the new administration in Albany may not be as friendly towards eminent domain as that of Client Number 9. As State Senate Leader in 2005, he held a rally calling for a statewide moratorium on the use of eminent domain.

Can you say Newark Nets?

Full post as published by Sports Biz on March 22, 2008 (boomark / email).