Developer Bruce Ratner says he’ll break ground on a new $950-million Brooklyn arena in December, but questions linger over his ability to obtain financing for the project.
Developer Bruce Ratner says he’ll break ground on a new $950-million Brooklyn arena in December, but questions linger over his ability to obtain financing for the project.
Multiple issues plague the arena project and the surrounding $4-billion Atlantic Yards development. The big issue at the moment: whether Ratner can tap into tax-exempt bonds issued by New York City for the project. Other sports projects, like the new Yankee Stadium, have tapped into this financing tool, but recent decisions by the Treasury Department have seemed to eliminate this for new projects; Ratner and New York City are awaiting a final decision from Washington, D.C.
But even if tax-exempt financing is available, there’s still the issue of obtaining all the financing needed for the project. A serious credit crunch means selling bonds for the project will be extremely difficult, and Ratner has already pressed city officials for $100 million more from the city, adding on to the $300 million already pledged for the project.
And, of course, one final issue looms: whether Ratner can get control of all the land he needs for the project.
These are tough times for developers: bankers are leery of making huge commitments to huge projects, and tax changes make previously easy sources of capital more difficult to obtain. Whether Ratner can pull this off — or if the project collapses under its own sheer weight — remains to be seen.
