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Continental Airlines Arena Articles
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Continental Airlines Arena Articles
CONTINENTAL AIRLINES ARENA PLANS NEW FUTURE
October 26, 2000
Copyright 2000 MediaVenturesThe Meadowlands' Continental Airlines Arena would still be used for concerts and other events if the NBA Nets and NHL Devils move to a new arena in Newark. That was the word from the head of the New Jersey Sports and Exposition Authority last week.
The arena lost nearly $1 million last year after hosting 239 events. Deficits are expected to increase to $6 million this year and in future years.
While officials had few details about how the arena would remain competitive, they were firm in the belief that they could make the building successful. In addition to competition from the new arena, it would also face competition from New York's Madison Square Garden. Garden officials have said they are beginning to look at building a new venue.
MORE PUBLIC MONEY TO BE ALLOWED FOR NEWARK ARENA
October 12, 2000
Copyright 2000 MediaVenturesNew Jersey Gov. Christie Whitman has decided to allow more public money to go into a new $325 million arena proposed by the NBA Nets for Newark. The governor had capped all public money at $75 million, but local officials, who want the new arena downtown, asked that they be allowed to increase their participation. Whitman will reportedly now allow the city and county to buy the land for the arena and help the partner company, Yankeenets, with low-interest financing.
Yankeenets have said they will invest $200 million in the arena that will likely open in 2004. It's not known how extra money will be used or if Yankeenets will increase its investment. The state's legislature must approve the final deal.
The state had hoped the teams would remain at the Meadowlands. The teams now play at Continental Airlines Arena, which all agree is outdated. The state said it would be willing to help build a new facility, but the Nets believed a Newark location was better. The state has apparently decided against pushing the Meadowlands site.
State does comparison shopping on sports arenas
Wednesday, May 10, 2000
By DOUG MOST
Staff WriterHow much should New Jersey taxpayers chip in to build a new sports arena? Thirty million dollars? Seventy-five million? One hundred fifty million? Should the public not pay a penny and let the team owners foot the entire bill?
Governor Whitman is about to face those questions. The owners of the New Jersey Nets and Devils are looking to build an arena in Newark, with the ultimate goal of revitalizing the state's largest city, and they are expected to meet with her this week to ask for state assistance. She'll be ready.
The state has been studying how much other arenas around the country cost and what percentage of the cost was public money. A sampling of the findings shows that recently built arenas cost between $160 million and $386 million, and received anywhere from zero public dollars to $137 million.
For example, United Center in Chicago was built for $175 million, with no public money. MCI Center in Washington cost $283 million and got $60 million, or 21 percent, in public dollars. In Philadelphia, First Union Center cost $205 million, of which $26 million, or 12.7 percent, was public.
Initially, the owners of the Nets said they would want $75 million from the state for their Newark arena, mostly for infrastructure improvements around the downtown site. If the arena costs roughly $300 million -- it's expected to cost no less -- $75 million would amount to 25 percent.
Those original estimates were for a one-team arena. Since then, however, the Nets owners agreed to purchase the Devils of the National Hockey League, and state officials and others close to the project say they are expecting officials from YankeeNets, the new owners, to ask for more than $75 million.
"I looked at their original proposal, and I'm expecting them to at least double that," one official close to the project said on the condition he not be identified.
Asked why he predicts the team owners won't be satisfied with $75 million, he said: "They've accumulated more facts. They're trying to develop a [more costly] two-team building, not a one-team building, and that changes some internal figures."
Both teams now play at Continental Arena at the Meadowlands Sports Complex in East Rutherford. YankeeNets executive Harvey Schiller could not be reached for comment.
Most experts agree that arenas with two teams deserve less public financing than one-team homes since they are probably monopolizing the market and automatically have almost 100 dates a year filled between basketball and hockey games. Filling another 100 to 150 dates with concerts, circuses, and other shows is not difficult, and earning a profit becomes much easier.
Whatever the YankeeNets' figure turns out to be, experts in sports arena funding say that although the trend these days is for arenas to be built mostly with private investments of the millionaire team owners, the public has shown some willingness to help out.
In the 1990s the public shelled out a total of $19.4 billion to help build 256 arenas and larger, more expensive stadiums.
Pete McDonough, Whitman's chief spokesman, acknowledged that the state has studied arena projects around the country. "We have looked at what other arenas have cost, and found between $136 million to zero in public dollars, and in no case did the public money exceed 28 percent of the financing," he said.
Asked if Whitman might bend and offer more than $75 million, he said: "We need to wait to hear what they have to say. The $75 million number is what we have heard so far."
If Whitman is questioning whether the arena will bring a substantial return on the state's investment by boosting Newark's economy and turning around the city's negative public image, experts around the country agree the answer is a resounding no.
"Do the stadiums pay for themselves through higher taxes? No, they don't," said Bruce Johnson, an economics professor at Centre College in Danville, Ky., who co-authored a paper this year titled "Value of Public Goods from Sports Stadiums."
"They're terrible investments," Johnson said. "They don't generate many new jobs, and the ones they do are low-pay and part-time. Arenas don't cause an increase in the income of a city or state."
What arenas do, he said, is simply shift where people spend their entertainment dollars, from restaurants and movies to basketball and hockey games.
And they cost a lot more to build than restaurants and movie theaters.
Pepsi Center in Denver cost $182 million, of which only $7 million, or 4 percent, was paid by taxpayers.
Conversely, Philips Arena in Atlanta cost $233 million, of which $63 million, or 27 percent, was public money.
"Arenas take up several blocks and when they are not in use, there's no need for anybody to be anywhere near them," Johnson said.
But Sam Crane, a former state treasurer who was active in the Newark arena plan in its early stages, said the location next to Penn Station makes the arena ideal because it will attract people from all over the state who don't want to fight traffic to get to a game.
"The real question is the return on investment," Crane said. "This absolutely could help Newark. It would accelerate the rebirth, which is what's already happening in Newark."
The New Jersey Performing Arts Center, he said, has succeeded beyond what many predicted and brought new business to a number of nearby restaurants.
Arenas are different, Johnson argued. Rupp Arena in Lexington, Ky., Busch Stadium in St. Louis, and the MCI Center in Washington were all built in downtowns with hopes of bringing new life and energy, with little success, he said.
"The track record on development around arenas has not been real encouraging," Johnson said. "People come in and they leave without spending their money there."
Andy Zimbalist, an economics professor at Smith College in Northampton, Mass., who has studied arenas' impacts on cities, agreed.
"All of the research that's been done says there's not an economic benefit to having these teams in a city," he said. "If there's a sound urban redevelopment plan, and the arena is one part of that, then it can make economic sense. But there won't be a total new economic activity."
But another industry expert said a downtown arena in a depressed neighborhood such as Newark almost always helps in the revitalization.
"For every Staples Center [in Los Angeles] and United Center [in Chicago] that is heavily dependent on private investment, there are arenas in Charlotte and Nashville and Columbus that have substantial public investment," said Rick Horrow, a Miami-based sports industry consultant.
"Many arenas are presented as reasons to spur urban development and have done that quite successfully," he said. "While they are not the only factors that revitalize downtowns, they always help."
Newark arena deal reached
Wednesday, April 5, 2000
By DOUG MOST
Staff Writer - New Jersey OnlineA sports arena and three office buildings would be built in downtown Newark under a deal reached Tuesday, and officials said they hoped the plan would spur retail growth and ultimately change the face and reputation of the state's largest city.
The agreement between YankeeNets and Edison Properties allows for the arena to be built close to Newark Penn Station, which the owners of the New Jersey Nets have said is critical, while leaving room for development between the arena and the train station.
Assuming Governor Whitman keeps a pledge she has made, taxpayers will pitch in $75 million toward the infrastructure around the arena for the Nets and Devils; the owners of the teams will foot the remaining costs, about $200 million.
"They [the YankeeNets] accomplished their principal goals, and we accomplished ours," said Alan Marcus of Edison Properties, which owns the land on which the arena would be built. "They got an arena in Newark, and we get commercial development next to Penn Station."
"YankeeNets is doing everything we can to keep the franchises in New Jersey," said Harvey Schiller, chairman and CEO of YankeeNets, the conglomerate that owns the Nets and Yankees. "We look forward to the state's assistance in helping us to achieve this goal."
Coming after 18 months of talks, the memorandum of understanding signed Tuesday could mark both the beginning of an era in the state's sports and entertainment scene and the end of one.
Continental Arena, at the Meadowlands in East Rutherford, has been home to the Devils and Nets for almost 20 years and hosted dozens of Bruce Springsteen concerts. It has been recognized as one of the best-run arenas in the country. But its paucity of luxury suites, and the determination of the Nets' owners to take their team to Newark, have made it only a matter of time before its time passes.
When the owner of the Devils agreed to sell his team to the Nets last month, ensuring that both teams would play in the same arena, talks heated up between Raymond Chambers, principal owner of the Nets, and Jerome Gottesman, chairman of Edison, officials said.
"We want the arena to act as an economic catalyst for the continued renaissance of Newark's downtown," said Raymond Levy, president of Newark Sports and Entertainment, a division of YankeeNets.
Two key hurdles that had to be cleared were the question of where, exactly, the new arena would be built and whether the Major League Soccer MetroStars would be a part of the plan, with a new stadium near the arena. Once talks over the YankeeNets purchasing a share of the MetroStars stopped, that issue was resolved, although MetroStars officials have begun talking independently with the city about a new stadium in the Ironbound, in the southeast section of downtown.
Edison and YankeeNets officials then agreed that the arena would be built on the east side of Mulberry Street, about a five-minute walk from the train station, leaving room for office buildings between the station and arena. Edison officials had wanted the arena west of Mulberry, for greater development close to Penn Station, but they agreed to compromise.
"They wanted it on the east side of Mulberry Street, and they met our concerns to ensure there would be economic development," said Douglas Sarini, vice president of Edison. "For us, the office buildings had to be close to Penn Station. We felt the arena would block development if the buildings were west of the arena."
Two changes must take place under the agreement: moving Mulberry Street about 24 feet west to make room for the arena, and demolishing homes and businesses along Liberty Street. Newark Sports and Entertainment has agreed to relocate those who are displaced to an area south of Green Street.
"We are pleased to learn of Newark Sports' adoption of the city's plan to pay fair market value to displaced homeowners in concert with the development of new housing for them," Mayor Sharpe James said. "The city will cooperate fully in building a world-class arena for the Nets and Devils and the revitalization of the surrounding neighborhood."
The mayor said the arena will "create thousands of new jobs for city residents, new opportunity for local families, and tax ratables for Newark."
James and others hope that a new arena and office buildings, all within a few minutes' walk of Penn Station, will invite retail businesses downtown, an area the Nets' Chambers has made it his personal crusade to revitalize. An extremely private man, Chambers was the driving force behind the New Jersey Performing Arts Center in Newark. He could not be reached Tuesday.
"I think the arena is just another element that provides an attraction and destination point for Newark that can only benefit the city," Sarini said. "Office buildings are vital to the economic development of the downtown. Jobs and tax ratables are ultimately what the citizens of Newark need."
The Nets and Devils each play only 41 home games -- not including playoffs -- a year, meaning an arena would be guaranteed to fill 82 dates. So organizers would have to seek other events to make it profitable.
Tuesday, April 4
Nets' arena to cost $275 million
Associated Press
NEWARK, N.J. -- A developer and the owners of the New Jersey Nets and the New Jersey Devils agreed Tuesday to build a $275 million downtown arena on a site a few blocks from the train station.The agreement between Newark Sports and Entertainment, an affiliate of YankeeNets, and Jerome Gottesman of Edison Properties resolves an argument over whether to locate the planned arena closer to Penn Station or in the heart of downtown.The parties were pushing sites about 600 feet apart on either side of Mulberry Street. YankeeNets and city officials preferred locating the arena next to the train station, believing that mass transit access was vital to ensuring the city arena's success.Gottesman, who owns much of the land on the site, favored locating it at Broad and Market streets, thus allowing to develop the adjacent land into office buildings.The "agreement in principle" allows Gottesman to build office buildings adjacent to Penn Station, while YankeeNets and the city will get to build an arena closer to the station than downtown.It also scraps a plan for a soccer stadium for the New York/New Jersey MetroStars. YankeeNets decided last month to remove the separate stadium from its proposal and replace it with a mixed-use development proposal that would include office space, television studios and educational facilities.
Nets trio will pitch arena plan to Whitman 05/11/99 By George E. Jordan
STAFF WRITER - New Jersey Online
Gov. Christie Whitman today meets face-to-face with the owners of the New Jersey Nets, who want millions of dollars in state subsidies to build a $233 million arena in downtown Newark, according to the Governor's Office and team officials.
The Nets will present the outlines of a plan that calls for state taxpayers to match the contributions by Newark and Essex County, which have been in discussions to give the team as much as $50 million in cash, property tax breaks and land, according to sources familiar with the talks.
Whitman will meet in her office this afternoon with businessman and philanthropist Raymond Chambers, developer Stanley Gale and Nets President Michael Rowe, all members of the Nets ownership team. Also accompanying them will be Rutgers University professor Clement Price, a Newark historian.
''We're not going to have any official comment," said James McQueeny, a Bergen County publicist and lobbyist hired by the Newark arena group. He confirmed that the group will meet this afternoon with Whitman.
The Nets owners are prepared to invest $200 million in private funds, and have dropped several not-too- subtle hints in recent weeks of their resolve to build the 40-acre complex in Newark with or without Whitman's blessing or financial support from the state.
The owners have spent months preparing thick spiral notebooks filled with elaborate architectural renderings, site plans, marketing and traffic flow studies that sell the advantages of moving the team to New Jersey's largest city. They also have retained the Hillier Group Inc., a Princeton-based design firm, to revise the site plan to limit the number of homes and businesses displaced.
Nets officials were behind closed doors as recently as last night revising financial projections for Whitman that detail the "majority private, substantially public" structure of the proposed arena, according to sources. The papers also spell out the state's proposed contribution toward arena construction, roadway improvements and signage, the sources said.
Essex County Executive James Treffinger said he was approached last week by the Nets for county subsidies in the form of cash and low-interest financing through the Essex County Improvement Authority. He declined to disclose details, but confirmed that the county would own "equity" in the arena and get a portion of any profits.
''I want very much to encourage this. Before there is going to be public monies at risk, from our viewpoint, I need guarantees that our taxpayers would be made whole," said Treffinger, who said he requested detailed financial statements and stronger assurances of earnings for county taxpayers.
Newark Mayor Sharpe James, traveling in Africa, could not be reached for comment. Earlier this year, he vowed the arena would cost city taxpayers no more than the $18 million the city invested in the New Jersey Performing Arts Center.
Alfred Faiella, Newark's deputy mayor for housing and development, declined comment through the mayor's press secretary, Pamela Goldstein. However, in a recent interview, he said the city could become a co- owner of the arena complex.
''We may have to bridge some of the financing gaps, along with other governmental entities," Faiella said. "If we contribute money, and we probably will, it will be an equity position. The ownership structure is still under study, and the vast amount will be privately raised."
Whitman is weighing two other proposals to replace the Continental Airlines Arena in East Rutherford. The New Jersey Devils propose a new arena in Hoboken, while the New Jersey Sports and Exposition Authority wants a new arena and retail campus on the grounds of the Meadowlands Sports Complex.
''It's a natural continuation of the proposals that were submitted (by) the sports authority and the Devils," said Peter McDonough, the Governor's director of communications. "If I had to characterize this next meeting, it would be to fill in some of the details."
McDonough said the Governor, who has announced her candidacy for the seat Sen. Frank Lautenberg (D- N.J.) will vacate next year, wants to move the review process forward to swiftly endorse one of the plans. "I don't know how drawn-out (the process will be), but it certainly is one that is going to continue. These proposals are so large," he said.
The Newark proposal calls for an 18,500-seat arena, a 30,000-seat stadium for the Metrostars soccer team, a television studio, a hotel, as many as 30 restaurants, parking decks, 300,000 square feet of retail space and 1.5 million square feet of office space. It would be completed for the fall 2003 season.
The arena has the backing of Chambers, a retired Wall Street financier, and corporate giants including Prudential Insurance Co. of America, Bell Atlantic New Jersey, Lucent Technologies Inc. and Bristol- Myers Squibb.
Newark residents voice objections to Nets arena plan
Friday, March 19, 1999
By JEFFREY GOLD
The Associated PressNEWARK -- Not everyone in the state's largest city is thrilled at the prospect of having a new sports arena for the New Jersey Nets built downtown.
Residents who would be displaced if the arena is built held a news conference in their neighborhood a few blocks from City Hall on Thursday and discussed their lawsuit, which seeks to block the development.
"Obviously, you can always improve a neighborhood, but the kind of development they are proposing wipes out a neighborhood," said Henry A. Laessig, who owns a home and architectural business there.
The dispute is another element of the turmoil created by the Nets and the New Jersey Devils, who no longer want to play in the Continental Airlines Arena at the state's Meadowlands Sports Complex.
The lawsuit, filed last month in state court by the neighborhood organization City Hall Redevelopment Group, charges that Mayor Sharpe James, the City Council, and Planning Board illegally declared the nine-block area blighted.
Such a declaration was needed in order to make the area attractive to the new owners of the Nets, who have indicated an interest in leaving the Meadowlands and building in Newark, the lawsuit said.
The neighborhood group asserts that residents were given little information about what was being proposed and were effectively muzzled at public meetings.
"They rammed this thing through so quickly, people didn't even have a map showing the extent of the area," Laessig said.
He said the meetings -- Dec. 21 of the Planning Board and Jan. 5 and 6 of the City Council -- were conducted amid the winter holidays, with little or no notice that the blight resolution was on the agenda.
A message seeking comment from the James administration, which has repeatedly endorsed a Nets move, was not immediately returned Thursday.
Nets spokesman John Mertz was asked for reaction from team owners, who have touted a new arena as a catalyst for reviving the city. He did not return a call.
In the past two weeks, the Devils, the Nets, and the Meadowlands have announced mutually exclusive plans for new arenas: the Devils owner said he would build a hockey-only arena in Hoboken. The Nets want the Devils to join them in Newark. The Meadowlands wants both teams to stay at a new arena at the sports complex in East Rutherford.
All three plans seek some public money, so Governor Whitman has some influence over the outcome. Her administration had not yet indicated a preference beyond stating she wants all the teams to stay in New Jersey.
The Newark group supports a new arena for the Nets in Newark -- just not in their neighborhood.
Laessig questioned how the neighborhood could be considered blighted, saying all 110 residences, including multifamily dwellings, are occupied. Several of the area's factories are shuttered, but others are operating, he said.
The blight declaration froze "naturally occurring investment and development" and permits for home improvements, and threatens to decrease property values, according to the lawsuit.
The Nets and Devils say they want to leave the Continental arena because it does not have enough luxury boxes and other amenities that make money for teams. The Meadowlands agrees that the 17-year-old building is outmoded and cannot be effectively renovated.
Arena plan in Newark loses some momentum 12/13/99 By George E. Jordan
STAFF WRITER - New Jersey Online
Nine months ago, the Newark arena project was called a slam dunk by the businessmen and philanthropists who vowed to move the New Jersey Nets downtown.
Only one major hurdle -- the frosty resistance of Devils owner John McMullen to even consider Newark -- seemed to stand between the group and its vision of a sports and retail campus.
But in the time it has taken McMullen to thaw enough for preliminary discussions in the past few weeks, several other potentially crippling problems have emerged. And so this morning, the arena remains little more than a fancy model in the Nets' offices and the following issues now also must be addressed:
A resurgent New Jersey Sports and Exposition Authority, landlords for the five pro sports teams that play at the Meadowlands, is back in the picture. Jim DiEleuterio, the authority's new director, has told friends he is advising Gov. Christie Whitman to stick with a master plan that includes building a new arena for the Nets and Devils.
The Newark group has failed to satisfy Whitman administration concerns about traffic flow and how the Nets could survive without the Devils as the only tenant in a downtown arena. All things being equal, the Governor's top advisers also are likely to decide the Meadowlands remains the best deal for taxpayers.
Newark City Hall last week canceled unveiling of the arena site plan and it could be another 60 days before the documents are sent to the Newark Planning Board. The plan, promised since summer, details financing, relocation of displaced families and businesses and placement of the new facilities on 40 acres downtown near Broad and Lafayette streets.
A lawsuit brought by Jerome Gottesman -- the president of Edison Parking, which owns the majority of the proposed Newark arena site -- is scheduled to go to trial next month. Gottesman is trying to block the city from using its power of eminent domain to seize his land and give it to the arena developer.
Officials of the MetroStars, New Jersey's Major League Soccer franchise, are considering staying at the Sports Complex in East Rutherford instead of moving to Newark or Elizabeth. Team general manager Charlie Stillitano said the authority is aggressively wooing the team to stay in the Meadowlands.
None of the setbacks was disputed by either former governor Thomas Kean or state Senate Minority Leader Richard Codey, two of the staunchest backers of the Newark movement, as well as by people in the Whitman administration.
''Signals coming from the Sports Authority and . . . the Governor's office (indicate) they are leaning towards the Meadowlands," Codey said. "However, there is a window of opportunity if we can get the teams together to agree on Newark. That would make the day. Short of that, it clearly makes it harder."
Codey, one of the first politicians to support the Newark arena, says he believes Whitman would endorse the Newark project if the Devils joined the Nets in a commitment to a downtown arena. The Star-Ledger on Saturday reported that two sides once again are discussing the possibility of the Devils coming to Newark, or even running the arena.
Kean, for one, doesn't think the collection of problems is insurmountable. "Nets ownership has not changed their plans. Their plans are to relocate in downtown," he said. "It's going to happen. But it's going to require work in some cases and negotiations in others, and a lot of that has been going on behind the scenes."
Meanwhile, Ray Levy, the executive director of Newark Sports and Entertainment, the arena developers, repeated that the team would put up cash and the city of Newark would float bonds to cover $300 million for the arena, parking garages and road repairs if Whitman agreed to approximately $75 million in sales and payroll tax rebates.
Levy said the deal -- the state providing the rebate in the form of a low-interest loan -- is similar to the incentives the state offers large corporations to remain in New Jersey or relocate from neighboring states. Last month, for example, the state gave IDT Corp. a lucrative package of payroll tax credits, training funds and $41 million in low-interest loans to renovate the telecommunications firm's new headquarters in Newark.
''The plan that we're outlining here is close to whipping out your wallet and paying for the arena ourselves," Levy said. "What we're looking for here is a very, very low threshold of funding."
Vowing to build the arena with or without Whitman's blessing, Newark Sports and Entertainment spokesman Jim McQueeny said "it just becomes a lot more expensive" without the Devils and public subsidies.
Alfred Faiella, deputy mayor for economic development and housing, said the arena plan was delayed to "tinker with the arena footprint," or the boundaries of the complex.
Whitman has said she would not invest state taxpayer funds in a new arena unless both the Devils and Nets agree to play their home games under a single roof. The recent merger of the Nets and Yankees into the YankeeNets could complicate the process because of bad blood between Yankees principal owner George Steinbrenner and McMullen, a former minority Yankee owner.
McMullen did not respond to several telephone messages.
The Nets owners -- led by philanthropist Raymond Chambers and parking mogul Lewis Katz -- said they were willing to spend in excess of $200 million to move the team to Newark. Mayor Sharpe James said he is confident they would honor their commitment.
''After my conversation with the principals involved, the city of Newark and the YankeeNets are more committed than ever before in building an arena in Newark. It will happen," James said in a news release.
The MetroStars franchise is another story.
Stillitano called the lack of progress "frustrating" because "in our view, Newark is a great site."
''We are looking for some direction from the state and the Nets ownership," Stillitano said. "We have not finalized our decision. There is nothing coming from the state that would push us in either direction."
Long Island woos Nets to return
12/24/97
By Jon Gelberg
STAFF WRITER - New Jersey Online
The Nets, reeling from the surprise announcement that the Devils want to move to Hoboken, are now seriously considering a move of their own -- to Long Island.
Officials of the Nassau County Sports Commission and the Palladium Co., a real estate investment company currently in the process of buying the New York Islanders, yesterday confirmed their interest in bringing the Nets back to Long Island. Parties on both sides of the Hudson confirmed recent discussions that hinge on a new Uniondale arena.
The proposal, at least a year in the works, would temporarily move the Nets into what is now Nassau Coliseum, where they played 20 years ago. Palladium already has plans to build a new "Coliseum" in Uniondale, which would eventually become the Nets' new home.
"We would love to have the Nets," said Stephen Ross, one of the partners in Palladium, the company that recently made a $195 million bid to purchase the Islanders. "But this is extremely premature. We don't even have the Islanders yet. Right now, our plan is to have the Islanders as the primary tenant and we would go ahead with the plan even if there wasn't an NBA team in place."
While informal discussions between the Nets and various corporate and government interests in Nassau County began over a year ago, the team's interest has intensified of late.
According to individuals intimately familiar with the situation, the Nets are afraid their bargaining power with the New Jersey Sports and Exposition Authority has been hurt by John McMullen's bid to move the Devils to Hoboken. The team has also been intrigued by plans to build a new state-of-the-art arena.
Nets President Michael Rowe refused to confirm or deny the report. He continues to insist that the team would prefer to remain at the Continental Airlines Arena, even if the Devils leave, which could hurt revenues at the building.
"We are in the process of negotiating a lease improvement with the Sports Authority," said Rowe. "Until those negotiations are completed, it would be inappropriate to comment on any other sites. It is still our first priority to sign a new lease at the Continental Airlines Arena."
Dr. Gary Wadler, the chairman of the Nassau County Sports Commission, a public/private organization whose board includes several high-ranking county officials, similarly refused to confirm or deny any talks with the Nets, but said his group is "extremely" interested in bringing an NBA team to Nassau County.
The Nets, when they were still in the American Basketball Association, played at the Nassau Coliseum from the 1971-72 season through the 1976-77 season before moving to New Jersey.
"The demographics have changed dramatically since the Nets were here," Wadler said. "Right now, Long Island has super demographics for the NBA. We're excited about the plans for a new arena here. Obviously, we'd love to have both the NHL and the NBA playing there."
While Rowe plays his cards close to the vest, another individual, with knowledge of the discussions, said the Nets were "very excited" about the Nassau Coliseum scenario.
"The place they're talking about has everything the Nets could want," he said. "The location is perfect. The facility will have all of the suites, concessions, restaurants the Nets could possibly want.
"More importantly, the owners are still close enough so they can stay involved with the team. That's something very important to them. They don't want to sell the team and have it move halfway across the country."
Robert Mulcahy, the Sports Authority CEO, was not surprised to hear of the talks.
"I would expect the Nets to explore every possible option," Mulcahy said. "But we are confident that we will be able to come to terms with them. The Nets ownership has always been very loyal to the state and to the complex. I think they realize it's in their best interest to stay in the market where they have built such a substantial constituency."
Ray Bateman, the Sports Authority chairman, agreed. He is confident that both the Nets and the Devils will be long-time tenants in a fully refurbished Continental Airlines Arena. He dismissed the Devils' move to Hoboken as "unfeasible" and said he was confident that the Sports Authority could come up with a deal that would be satisfactory to Nets ownership.
"Face it, Nassau County has not had great success with any of their professional franchises," Bateman said. "I'm sure that we'll be able to keep both the Devils and the Nets content in our refurbished arena."
Rowe yesterday did acknowledge the team had been approached by potential buyers from several states, but said the Nets had not initiated any of the overtures.
"Of course we're going to listen to anyone who wants to talk to us," he said. "But we're in no position to have serious talks until we have gone through the negotiation process with the Sports Authority."
The Nets have the right to terminate their current lease following the 1999-2000 season. They had hoped to begin negotiations with the New Jersey Sports and Exposition Authority in November, but talks have yet to begin.
NEWS RELEASE June 6, 2001
DIFRANCESCO ANNOUNCES AGREEMENT TO KEEP
DEVILS, NETS IN NEW JERSEY
Shifts focus to finalizing plans for the future of the Meadowlands
Acting Governor Donald T. DiFrancesco today announced that the Devils and Nets will continue to be New Jersey teams and play in Newark under terms of an "agreement in principle" that calls for a state-of-the-art arena to be built in the state's largest city. Under the agreement, the general taxpayers of New Jersey have no obligation. The agreement does not require any budget appropriation.
"Less than three months ago, I asked Lewis Eisenberg to lead the effort to develop a plan that brings together all the parties who have a stake in the future of professional sports in New Jersey," said the acting Governor. "Today, I am pleased to announce that this effort has succeeded."What is most unique about the proposal is that the general taxpayers of New Jersey will have no obligation. There will be no budget appropriation, no contract bonds. The economic activity generated by the arena and the resulting economic improvements will self-finance the construction of the arena."
The agreement calls for the arena to be owned by the state, but built, maintained and operated by the YankeesNets organization. The Devils and Nets will sign a 30-year lease and play there for at least the next three decades. Total costs are estimated at $355 million, with $115 million coming from the Devils and Nets and $190 million from sales tax revenue generated locally by the teams, the arena and other economic redevelopment projects. Fifty million will come from revenues generated in Essex County and the City of Newark. (Additional details attached.)
"The arena will finance itself, and serve as a professional sports venue, as well as a catalyst for additional economic redevelopment," said acting Governor DiFrancesco.
"From the day I asked Lew to work on this project, I made it clear that we had specific policy goals, including protecting taxpayers, keeping the teams in New Jersey and maintaining our commitment to the Meadowlands Sports Complex. Today, we have more than met those goals."
DiFrancesco also announced that negotiations are continuing regarding the future of the Meadowlands.
"I am committed to ensuring that the enormous potential of the Meadowlands is realized. To that end, we are moving ahead to develop the long-awaited transportation improvements that a premier sports and entertainment facility like the Meadowlands so desperately needs. I am committed to connecting the Meadowlands to existing rail lines that will make the Meadowlands accessible from Penn Station in New York and 11 rail lines in New Jersey," he said.
The acting Governor said his goal is to have a world-class city in Newark -- and a world-class sports and entertainment facility in the Meadowlands.
"The people of New Jersey deserve the very best in both places," he remarked.
(Talking points are attached.)
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Key Terms of the
Agreement in Principle
Between
The YankeesNets & Acting Governor DiFrancesco
- The New Jersey Devils and Nets will remain New Jersey teams and play at a new arena in Newark under terms of a 30-year lease.
- Under this agreement, the general taxpayers of New Jersey have no obligation. The agreement does not require any budget appropriation. No contract bonds are anticipated, thus general state taxpayers are in no way obligated in the unlikely event of a default. In essence, the economic activity generated by the arena and the resulting economic improvements self-finance the construction of the arena.
- Total cost to build the Newark Arena facility is estimated to be $355 million. Those costs will be paid for under the following terms:
- $115 million from the Devils and Nets.
$190 million financed by tax revenues generated locally by the teams, the arena, its users and the other economic redevelopment activity (i.e. hotel, shopping, etc.) that will come with the development of an arena in Newark.
$50 million financed by revenues generated to Essex County and The City of Newark.
Additionally, $30 million in improvements to public roadways in Newark will be undertaken through the Transportation Trust Fund.
Under this plan, the state creates a new entity, the "Sports Entertainment District" (SED). A portion of the sales tax revenues generated within the SED will be pledged to service the debt incurred by the SED. In the case of the Newark SED that debt is the $190 million listed above. The repayment obligation belongs to the SED, not the state.
Currently, Newark enjoys designation as an Urban Enterprise Zone. The SED replaces the UEZ in Newark. Under this plan, the sales tax rate in Newark will return to 6% upon the creation of the SED and revenues beyond those currently received by the state and city will be used to service the bond debt. Today, the State of New Jersey receives roughly $4 million and the City of Newark $2 million of the sales tax collected in Newark. That will continue and the city and state budgets will continue to receive the same revenue. Any excess monies generated within the SED beyond what is necessary to service the debt and pay the current obligations to the state and city will return to the state. Thus, this plan is at least revenue neutral to the State of New Jersey. Given the additional economic activity that will come with the Arena, it is almost certain that the state taxpayers will benefit from this plan.
Some of the new economic activity generated in Newark may be derived from projects encouraged under S-2173, pending before the legislature, which would require casinos to invest in projects outside of Atlantic City in order to take advantage of development incentives available through the Casino Reinvestment Development Authority for projects in Atlantic City. The legislation requires that casinos allocate at least $20 million to one or more approved entertainment, retail, or community housing and development projects in an urban area outside of Atlantic City in order to be eligible for financial incentives for projects in Atlantic City. Given the involvement of the casinos through the CRDA, the casinos or the CRDA may be called upon to guarantee a portion of the revenue being used to support the SED bonds.
The Newark Arena will be owned by a New Jersey government entity. The New Jersey Devils and Nets will enter into a 30-year, triple net lease with responsibility for all operations and operating costs. The YankeesNets will make payments of $500,000 per year for the first 5 years and $1 million per year thereafter to fund future capital improvements. All revenues generated at the Arena are retained by the YankeesNets.
The YankeesNets will be the developer of the project and is responsible for the management as well as the costs of construction. The SED will not be responsible for any amount in excess $190 million detailed above and any additional funding needed to complete the project is the sole responsibility of the YankeesNets. The YankeesNets are responsible for negotiating the terms, if any, under which Essex County and the City of Newark participate in the financing of this project. Should Essex County and the City of Newark participate, however, the terms of their participation are subject to approval by the State of New Jersey.
- The Sports and Exposition Authority will agree that the Continental Arena will not compete with the Newark Arena after December 31, 2004.
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