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RATNER

I WANT A QUARTER BACK

Looking to sell 25 percent of Nets

The Brooklyn Paper
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The Brooklyn-bound New Jersey Nets need cash.

Nets owner Bruce Ratner is trying to sell a $60-million stake in the team he laid out $240 million for in 2004 — a move that would help keep the team afloat while it’s stuck in the Meadowlands pending approvals for an arena in the proposed Atlantic Yards mega- development, the Star-Ledger of Newark reported this week.

The Nets lose between $20 and $30 million annually, according to the Star-Ledger. But the team, which Ratner originally said would move to Brooklyn for the 2007-08 season, is now expected to remain in its New Jersey moneypit until the 2009-10 season or longer, judging from a conference call with investors last week in which Ratner predicted that construction of the entire Atlantic Yards project could take 15 years, up from his earlier prediction of a maximum of 12 years.

A spokesperson for Forest City Ratner told the Star-Ledger that the company was “looking to raise new equity to increase liquidity.”

This latest search for new financial backers comes at a critical time for the project, just prior to the release of an environmental assessment that is supposed to detail the project’s impacts and mitigation costs. In addition, Forest City Ratner is in the midst of the project’s first — and time-consuming — legal skirmish with project opponents.

Delays in construction of the most-expensive arena ever are something Ratner desperately wants to avoid.

As The Brooklyn Papers reported last month, the developer has said he loses $4 million every month that he does not build.

Ratner’s increasing reliance on private investment partners doesn’t surprise those in the sports world.

“The owner of a franchise is often someone who built an empire on private investment,” said David Carter of the University of Southern California Sports Business Institute.

“And if you are building a new venue [in addition to just operating the team], it means more risk investors will have to take on for a much bigger return.”

If history is any guide, new investors are a money tree that does not grow in Brooklyn.

Only 16 percent of investors who came on board after Ratner bought the Nets live or work in the 718 ZIP-code, according to a list obtained by The Brooklyn Papers.

The most-prominent names on the list are Ratner relatives. In addition, the project is backed by Brooklyn Museum Chairman Robert Rubin; Brooklyn-born rapper Jay-Z; Lyor Cohen, head of Warner Music Group; and disgraced Tyco executive Dennis Kozlowski.

A large number of investors are based in the real-estate industry, which critics say shows that the Atlantic Yards project is more about development than athletics.

In his conference call last week, Ratner reassured investors that the project would prove lucrative.

“I look at as a business challenge [but] one we’re really up to,” he said, “The arena will be brand new, Frank Gehry [designed]. It will do extremely well.”

Ratner predicted that the final environmental review of Atlantic Yards would be done by mid-fall. “And we would start construction four to five months after that.”



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