They had a Letter of Credit issued, which is far from the permanent financing that is needed on their part. This is a short term solution. It provides a degree of comfort to the City of Newark. The underlying fact is that the L/C is cheaper, cost wise. The Devils are most likely paying about 1.5% to 2.5% instead of Prime +5. The next critical issue is the closing of the permanent financing. When that deal closes there will be a host of closing costs and fees, some BIG FEES. Therein lies the real problem. In all likihood NJ will finance the closing costs and fees. They will have to do creatively because the regulators typically frown on this, but there are ways around that. It just makes the costs of financing that much greater.sveiglar said:But how did they do this? They didn't have the moneeeeeee!!!1
ATLANTARANGER said:They had a Letter of Credit issued, which is far from the permanent financing that is needed on their part. This is a short term solution. It provides a degree of comfort to the City of Newark. The underlying fact is that the L/C is cheaper, cost wise. The Devils are most likely paying about 1.5% to 2.5% instead of Prime +5. The next critical issue is the closing of the permanent financing. When that deal closes there will be a host of closing costs and fees, some BIG FEES. Therein lies the real problem. In all likihood NJ will finance the closing costs and fees. They will have to do creatively because the regulators typically frown on this, but there are ways around that. It just makes the costs of financing that much greater.
The key here is whether or not the City of Newark removed their requirement that the financing be guaranteed by NJ, meaning thjat they foot the $100M whether they proceed or not. The danger here is that the longer this project is delayed the closer the Mayor, who is driving this, is up for re-election. If the Mayor is not re-elected and this project is stalled and the City has a way out do not be surprised if this thing crumbles. The City of Newark is in dire straits and is banking big time on this project. Many that oppose this project could see a better use for the money that is being used on this project for some other "public works" project.
Josetheodore said:Do you even know how this arena was really financed?
Sharpe James is the most powerful mayor in the country. The guy rules Newark, for better or worse. Under him things in the "dire" city have turned a corner. Like all major cities, Newark has its fair share of problems. There are townhomes in Newark selling for between 400k-600k in the downtown core. NJPAC was built, minor league baseball park and lots of housing development. While he may not be everyone's choice for mayor, James' is committed to making Newark a better place. He's also a state legislator and has clout in Essex County. The election is in May and he hasn't announced his intentions yet. The new governor and new mayor will not kill the deal.
Its costing the Newark taxpayer ZERO dollars. Most arenas have cost city tax payers big money. While we can debate social programs vs. Arenas, the fact is a sports venue in Downtown Newark with access to mass transit, Ala MSG is great lynchpin for development.
NEWARK, N.J. -- City officials want the New Jersey Devils to guarantee the team will spend $100 million on a new downtown arena and have given the NHL franchise a Tuesday deadline to put that commitment in writing.
Monteilh said the Devils have indicated "they'll be ready," but if the team doesn't hit the goal, "then the project is dead."
I knew what I was talking about and devil fans didn't? Surely we all would have thought that devil fans being insiders would know more than a disgruntled and jealous ranger's fan! Louie, show us the MONEY!Spongebob said:I thought this was suppose to be a done deal.....At least according to Devils fans.
http://sports.espn.go.com/nhl/news/story?id=2303214
If this is so cut and dry then why all of the waiting till the last minute drama?
ATLANTARANGER said:I knew what I was talking about and devil fans didn't? Surely we all would have thought that devil fans being insiders would know more than a disgruntled and jealous ranger's fan! Louie, show us the MONEY!
Blackjack said:But isn't it funny that every spring, in the Garden, they're shoveling elephant **** off the floor instead of scraping ice?
Hey, whatever pays the bills MSG
of the regular season we still out draw the devils even when you include their playoff attendance? Maybe if their playoff games were sold out they could pass us in total attendance with all those extra games.Blackjack said:You have more posts, and seemingly more interest in this thread than anyone else. I guess you're enjoying our struggle, can't think of any other reason for it.
Hey, let's face it, whether or not The Devils get a new arena, it won't be Madison Square Garden. I mean, we have Newark and East Rutherford to choose from, not exactly Manhatten.
But isn't it funny that every spring, in the Garden, they're shoveling elephant **** off the floor instead of scraping ice?
Hey, whatever pays the bills MSG
business contracts and loan agreements would know that one does not put their john hancock on the dotted line if such things as costs over runs have not already been addressed! You don't negotiate that point if you've signed a contract!Joe1-Lou2 said:The financing by the Devils was provided. The Devils are on the hook. About the only things a certain someone has written that is true the Devils have been slow to put up the money because financial costs. But not because of declining attendance but because the Devils do not want to pay for interest on money that is essentially will not be used for many months.
If certain someone knew what they were writing about it would be the fact the Devils might have still not secured the insurance against cost overruns. The Devils are responsible for any cost overruns. The overruns could easily double or even triple their initial investment. Under the agreement the Devils would be responsible and anyone in finance would know a investment of 100m vs 300m dramatically changes the model. My guess is the Devils have secured the insurance against overruns.
The Devils delay in securing finance has nothing to do with attendance. The attendance argument is just someone looking for the opportunity to use his old and tired put down of the Devils.
brylin18 said:The Devils could win 3 more cups in their new arena and this guy would still be babbling over something about its financing. Hey Einstein, check the Devils official website. There's a live webcam on the construction site. The land has been cleared and construction is soon to begin.
brylin18 said:The Devils could win 3 more cups in their new arena and this guy would still be babbling over something about its financing. Hey Einstein, check the Devils official website. There's a live webcam on the construction site. The land has been cleared and construction is soon to begin.
sveiglar said:But how did they do this? They didn't have the moneeeeeee!!!1