Release Main Page
For Immediate Release: September 23, 2009
Bruce Ratner’s Oligarch Arena
Desperate Bruce Ratner Reaches to Russia in Rescue
Attempt for Brooklyn Arena Project
NBA and Treasury Department Must Vet Billionaire
NEW YORK, BROOKLYN, MOSCOW — Enter the oligarch.
Start the vetting.
Just when you thought the Atlantic Yards project couldn’t get more corrupt,
developer Bruce Ratner has announced a partnership with Russia’s richest
oligarch, Mikhail Prokhorov, in an attempt to rescue the floundering Atlantic
Yards project. The precise terms of the deal, in a signed letter of intent,
are not clear, but the oligarch's Onexim Group would invest $200 million
and make certain contingent funding commitments to acquire 45% of the arena
project and 80% of the NBA team, and the right to purchase up to 20% of
the Atlantic Yards Development Company, which would develop the non-arena
real estate (16 proposed skyscrapers).
The project faces a major legal obstacle in an eminent
domain challenge to be heard in New York State’s high court—the Court
of Appeals—on October 14. If the property owners fighting to keep New York
State from seizing their homes for Ratner and Prokhorov’s enrichment succeed,
Atlantic Yards, arena and all, will be dead.
Other litigation is pending and more lawsuits against the project are expected
from the community's opposition to the project.
For years, and as recently as last week, Ratner said publicly that his money-hemorrhaging
team was not for sale. That appears to be yet one more deception from the
“This has got to be a huge wake-up call for Ratner’s political supporters.
The only reason Ratner would make this deal is because he is in dire financial
trouble. If Ratner has to go overseas to get major funding for the arena,
how on earth is he going to finance the rest of the project,” said Develop
Don’t’ Destroy Brooklyn spokesman Daniel Goldstein. “Eminent domain abuse
and massive taxpayer subsidies to enrich a Russian oligarch and modernize
the Russian basketball system—is that what Bloomberg, Paterson, Schumer
and Markowitz are all about? They’ve got to be kidding. And now that Prokohorov
has a big foot in the door, who will really be running the beleaguered Atlantic
Yards project show?”
There are many unanswered questions about Mr. Prokhorov's—a former nickel
baron, now the chairman of Polyus Gold, Russia’s largest gold producer,
and head of the Onexim investment group—wealth, his liquidity claims and
where the money is coming from for his proposed investment in the Nets and
Russian oligarchs are under sway of the Kremlin—they are not who they are
without the backing of the Kremlin. Any Prokhorov investment in the Nets
and the Brooklyn arena will be influenced by the Kremlin. According to
Irina Y. Yasina, a researcher at Russia’s Institute
for the Economy in Transition, quoted in The
New York Times, “In Russia today, no serious deal can be made without
approval from the Kremlin.”
“Russians and Kremlin leadership should
understand very clearly that with this deal Mr. Prokhorov is entering into
one of the biggest real estate boondoggles in New York City’s history, and
New York’s most controversial real estate deal this decade “ Goldstein said.
Prokhorov has been accused of asset
stripping, abuse of
corporate governance and violations
of minority shareholder rights. He was arrested
in France in 2007 on suspicion of involvement in a prostitution ring.
More ominous for Forest City Ratner is Prokhorov’s recent reneging
on his deal to purchase the $643 million Villa Leopold, the most expensive
mansion on the French Riviera.. This doesn’t bode well for the strength
of the oligarch’s commitment to Ratner’s project and the Nets.
Amongst other disturbing aspects of the multi-billionaire potential Ratner
partner and NBA owner—the National Basketball Association would have to
vet Prokhorov and 75% of the 30 team owners would have to approve the deal
with Ratner, as would the US Treasury Department’s Committee On Foreign
Investment In The United States (CFIUS)—is the reported link of the Russian
aluminum giant, UC Rusal, with organized crime.
Wall Street Journal reported in December 2008:
“Suspected ties to organized crime -- which [UC Rusal head]
Mr. [Oleg] Deripaska denies -- led U.S. officials to revoke Mr. Deripaska's
entry visa in 2006. Mr. Putin and other top Russian officials
have repeatedly raised the issue on his behalf with their U.S. counterparts,
so far to no avail, according to people familiar with the situation.”
Mr. Prokhorov owns 18.5% of UC Rusal and there is evidence, according
to the Asia Times, that he might replace Deripaska at the helm
of UC Rusal. Deripaska is the only oligarch whose business ventures in the
US have been vetoed by the US government.
Mr. Prokhorov wrote on his blog on September 22 (see the full translation
of his blog post below or here):
“For our group, participation in such a complex project undoubtedly
is interesting only in the event that NBA technology can be used for the
systematic development of basketball in Russia. … For our group ‘ONEKSIM’,
the realization of this very profitable [Atlantic Yards and Nets] business
project, to which we were invited thanks to the world financial crisis
(there has never been a foreign owner of an NBA club), will be yet another
path for developing our sports interests alongside the biathlon, support
for children’s sports and sports of high achievements.”
“Bruce Ratner has really done it this time. He’s desperate to stop the bleeding
on his New Jersey Nets so he has turned to a Russian oligarch whose finances
and business practices are questionable and require scrutiny and vetting
not just by the NBA and David Stern, but by the federal government including
the Treasury Department,” Goldstein said. “We never thought the fight against
the crooked Atlantic Yards deal could get more crooked or that it would
require a degree in Kremlinology, but clearly Mr. Prokhorov is eyeing the
Nets and this key piece of Brooklyn to build some Russian-NBA pipeline,
and sow his wild playboy oats—so much for Ratner’s mantra that this project
is ‘about Brooklyn.’ We don’t need to be Kremlinologists to know that Mr.
Prokhorov doesn’t care one nickel about Brooklyn or know squat about Brooklyn."
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