Discussion in 'The Business of Hockey' started by Mr BLUEandWHITE, Jan 13, 2006.
looks like there will be a new arena in newark
But how did they do this? They didn't have the moneeeeeee!!!1
studium naming rights helps, i guess they arent going to call it the "Sharpe James Arena" afterall
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.
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.
Zero dollars? Whose money is it then that the good mayor is using?
Did he win mega millions, or is he using the money that is due the people of Newark from the Port Authority? I am not arguing the obvious benefits to the arena. In fact your points assist me on my argument. With all these benefits why is NJD's dragging their foot? Look beyond your rose colored glasses and see what the true obsticles are. This whole conversation started about the lack of impact fan attendance has on this project and the team in general. The events of the past few weeks show exactly the opposite, that the lack of attendance is having an impact. You just refuse to acknowledge it and just because you refuse to acknowledge it does not invalidate it.
Newark has been a decline ever since the Newark Bears (the originals) left the city. Their impact was much the same that the Dodgers had on Brooklyn. Neither has recovered. This is a huge investment for the people of Newark. NJ is known for their political under the table dealings which closely resembles the City of Chicago under another all powerful Mayor.
Personally I think it is going to come down to 6 of one, half dozen of another for devl fans. Why? They complain already about traveling to the dump now they are going to have to drive to a mass transit hub, park, pay for mass transit, take longer to get there and do it again on the way home, or drive and pay maybe more for parking then they do now. Initially I thinkl the new arena will draw good crowds. But, the devils are not a cheap game to attend I would think it would only get more expensive, rather than less expensive and that too has always been a complaint of you NJD fans. Though I find it hard to comprehend when NJ is one of, if not the, highest per captia income areas in the whole of North America!
I thought this was suppose to be a done deal.....At least according to Devils fans.
If this is so cut and dry then why all of the waiting till the last minute drama?
Gee! Does that mean that
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!
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
Hey, just more evidence of the Garden doing its part in society. Not only do we host such great events, we even provide job opportunities for the people of New Jersey. Its a prefect fit really, they should alredy be used to the smell.
Anyways, back on topic. Im glad to see that they are solving their arena problems. Now all they have to do is solve their fanbase problems.
How is it that with our season ending after the end
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.
Reason # 1,244,567 as to why the devils owner hasn't put up his S L/C!
P.S. Have I been wrong? No, I've been 100% accurate on what I've been saying. Truth hurts, doesn't it!
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.
Anyone who had the slightest knowledge of financing
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!
As far as not paying interest on a loan goes, that is the sole purpose of a S L/C. It is a subsitute for the actual cash outlay. It is a cheaper financial instrument. When the time comes to pony up the dough, if NJ renegs in any shape, size or form, the S L/C is presented and payment is demanded.
At a certain point in time the S L/C will have to be replaced with permanent financing in the form of a term loan. All that has transpired is what I said all along. The sad part is is that the brains in NJ dragged their foot on something that should never ever have gotten to the point it did. If you still think that there were not problem I guess you also believe in the tooth fairy too!
The longer this went on the greater the posibility of it falling apart. If you any of the reports the criticism is starting again regarding the wisdom of the City of Newark spending this money. There was no reason to get into that situiation again for the team or the city. I look forward tot he new arena and look forward to NJ leading the league in attendance and finally supporting a quality organization with the type of fan support it deserves.
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.
I broke one of my cardinal rules in responding to certain misinformed posters who has an obession with the Devils because he has had nothing to root for. He keeps saying the problems with the financing of the arena is attendance. If he really was looking for a discussion on the arena he would have done the proper research but he only wants to take his tired jab at Devils fans about attendance.
I knew that was his plan and I fell into his trap but not again. I plead with Devil fans to show restrain no matter how hard it is and ignore. Posters like him ruin discussions and we make it worse by responding.
Devils Guarantee $100 Million
Wednesday, January 25, 2006
By JOHN BRENNAN
The New Jersey Devils presented a $100 million signed letter of credit to Newark officials Tuesday, guaranteeing the National Hockey League team's stake in the $310 million arena.
The letter - from CIT Financial of Livingston - was addressed to the Newark Housing Authority, which is the city agency managing the project with the Devils.
"Let this definitive, final agreement leave no doubt that the Devils will start playing in Newark in 2007," said the hockey team's principal owner, Jeff Vanderbeek.
Certain fans cheer for the suits that make it all happen, the Dolan family. All hail the Boardroom.
They probably made a deal with Tony Soprano or Johnny Sack to use some money from the Riverfront Esplanade and Museum of Trucking to finance it.