It's been a little more than three years sinceBarclays Center, the 18,000-plus seat arena that's home to the NBA's Brooklyn Nets and the NHL's New York Islanders, opened on the site of Atlantic Yards in Brooklyn. After debuting in September 2012 with a series of sold-out Jay-Z shows, the mixed-use facility has held dozens of high-profile concerts and even hosted the 2014 Rock and Roll Hall of Fame induction ceremony.
But despite its flashy entrance into a metropolitan market that already has three major indoor arenas, the project has turned out to be (surprise!) a financial loser, failing in just about every quantifiable measure. The promised "affordable housing" has yet to materialize and where the construction of new housing is even being attempted there are major structural and engineering problems. The opening of a few new businesses in the shadow of the arena can't exactly be credited to its existence, as the surrounding areas had been becoming a more desirable place to work and live for years prior to its construction.
Neil Demause writes in the Village Voice:
As for Brooklyn residents, we now have a terrible basketball team to watch, and a pretty decent hockey team, and a garish arena and some growing housing towers on a site that otherwise would probably have something similar anyway, given that pretty much every possible site in Brooklyn now has a ginormous apartment building going up on it. And any revitalization effect on the surrounding neighborhood has been mixed at best: There’s a Shake Shack and other new restaurants, certainly, but then, there were new restaurants opening in droves in that area even before the arena was planned; data provided to the Voice by the city Independent Budget Office doesn't show any indication that more new businesses have opened in the Barclays Center's 11217 zip code than in other nearby parts of Brooklyn. Meanwhile, the site of the old Triangle Sports sporting goods store, which was cited as the harbinger of a land rush when its owners closed it and put the building up for sale, is still vacant almost four years later.
It’s probably too simplistic to say of the Brooklyn arena that everybody ended up a loser, but we certainly haven't seen any slam-dunk winners yet. So for now, man, is this turning out to be an epic train wreck, or what?
Writing at the Atlantic Yards Report, Norman Oder lays out the current financial details of the "train wreck":
The Barclays Center had a terrible year financially in the fiscal year ending June 2015. Net revenues plummeted, to less than half the total once projected, and the arena lost some $9 million in what was (roughly) its third year in operation.
A hint of the news emerged in a bond rating document released upon the arena sale Dec. 22, then was detailed in a financial statement--Consolidated Statement of Operations for Brooklyn Arena LLC--released at 4 pm on New Year's Eve, seemingly timed to bury the news.
The arena's net operating income (NOI) fell well behind expectations, to $38 million, due to declines in event and related revenues, while operating expenses remained high.
Speaking at the site's groundbreaking ceremony in 2010, then-New York City Mayor Michael Bloomberg declared that in 100 years, "nobody's going to remember how long it took. They're only going to look and see that it was done." Typically imagining himself as a benevolent master with a grand vision, Bloomberg considered the public-private development of the Atlantic Yards as his gift to the people of Brooklyn, which his friend and fellow billionaire Bruce Ratner promised would be an "urban utopia."
In reality, it was primarily a gift to Ratner and required the extensive use of eminent domain for the real estate developer to gain control of the property and build his "new neighborhood from scratch," which in addition to the arena was supposed to include more than a dozen skyscrapers. But as Reason's Damon Root wrote in 2011, "To build the Atlantic Yards from scratch meant you first had to wipe part of an existing neighborhood off the map." This meant evicting residents and businesses which had been a part of the community for decades.
As Root also notes, that was far from the worst of it:
In a noxious example of crony capitalism, the Metropolitan Transit Authority (MTA), which runs New York City’s subways, buses, and commuter trains, struck a secret deal to sell Ratner a crucial piece of real estate—an eight-acre train yard—that lay at the center of the Atlantic Yards footprint, without first opening up the property for competitive bidding. In response to the negative media attention generated by [homeowner Daniel] Goldstein and other activists, the MTA announced in 2005 that it would entertain bids after all—but only if those offers were submitted within a mere 42 days. Ratner’s detailed plans had been in the works for years, while his would-be competitors had to scramble.
Yet the real estate firm Extell did file on time, submitting a $150 million bid. Ratner then countered with a lowball offer of just $50 million and still won the rights. That figure was later negotiated to $100 million, which was still significantly less than Extell’s bid. Then in June 2009 the MTA bailed Ratner out again, allowing him to pay a measly $20 million up front, with the remainder due over the next 22 years. As the film points out, this sweetheart deal went down at the same time the MTA was raising the price of bus and subway fares.
Barclays Center is a fitting poster child for eminent domain abuse and the always unfulfilled promises of urban renewal via importing a professional sports team. The seven-year-long saga of the efforts of the Brooklyn community to fight the government's efforts to seize private property and hand it over to a billionaire offering a low-ball figure was the subject of the the Oscar-shortlisted documentary The Battle for Brooklyn.
Reason TV interviewed the film's co-directors upon its release in 2011. Watch below:
Photo Credit: Dreamstime/Zhukovsky