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IRS latest potential problem for Atlantic Yards

Atlantic Yards guru Bruce Ratner’s plan to use tax-exempt financing to build an arena in Brooklyn may be in big-time jeopardy.
The folks running the Atlantic Yards project in Brooklyn that would encompass a new arena for the NBA’s Nets may have thought they had run into every obstacle possible already.

Guess again.

Some proposed new Internal Revenue Service rules could do more damage to Bruce Ratner and Co. than any protester could have ever imagined. Ratner’s plan to use tax-exempt financing to reduce what it costs to borrow millions of dollars may be in jeopardy if the IRS decided to follow through on the idea of tightening the rules.

Thanks to a push from NVY Mayor Michael Bloomberg, the Yankees and Mets received IRS approval to use these types of bonds to get the money to start building their new ballparks. (Both are supposed to be ready for next season.) But the new proposed regulations would make it  impossible for Ratner to get the bonds at the same rate the Yankees and Mets did. If that happens, the entire deal could be in big trouble.

The group has been battling neighborhood protesters and a sluggish economy. Tenants have been hard to come by for a proposed office complex. Still, the plan is to break ground in the fall and have the arena for 2011.

At least, that is the plan for now. Let’s see what the IRS has to say.