Yesterday, developer Bruce Ratner was rejoicing over the news that Russian billionaire Mikhail Prokhorov has bid to buy a majority stake in the Nets, and thereby pony up $200 million in cash to boost his Atlantic Yards arena, residential, and office projects. As our sports guys pointed out yesterday, this sounds fun from the athletics angle. At six foot seven, Prokhorov is already boasting that he'll be "the only NBA owner who can dunk." He'll also be the only non-American or Canadian owner of a team ever, and hopes to bring more Russians to the game. For Ratner's part, this is also a win. He never cared as much about owning the actual basketball franchise as much as just moving it to Brooklyn so he could build his massive development around its arena. While he'll give up 80 percent ownership of the team to Prokhorov, he'll still be the majority stakeholder in the real estate, and the added $200 million goes far in getting it actually realized.
There is still hope for critics of the arena project, though, who have been fighting against it from the very beginning. There are three major hurdles to this seemingly quick fix:
• A hearing at the New York State Court of Appeals is scheduled for October 14 to review a challenge to a previous ruling that the state could use eminent domain in this case to seize land for use by a private developer for commercial purposes. This is a very contentious issue, and one that foes of the project have long pinned their hopes on.
• Prokhorov still needs to get approval from 75 percent of the NBA's owners. This is probably not a very big hurdle: Owners will want to expand brand appeal to the Russian market, which he hopes to do, and plus, foreign owners of teams are becoming increasingly common in other sports.
• Ratner is facing a December deadline to break ground. If he doesn't, he will lose access to financing from tax-free bonds. Because of this, the deal is conditional upon Ratner having financing for the arena project and control of all the land by the end of the year. If he doesn't swing these parts, the whole thing seems likely to fall through.
The last point raises a bigger question: Bruce Ratner convinced the city and state to cut him massive deals so that he would be able to afford to build this complex, which he insisted would be for the greater benefit of Brooklyn. But Prokhorov, with his $14.9 billion net worth, is in a position to finance the project on his own — and yet his offer is contingent upon the tax breaks and subsidies that Ratner has spent years brokering. Will it look good for a Russian billionaire to receive so many public-finance crutches for a profit-making enterprise here in New York? Probably not, if critics really sink their teeth into it.