While searching around the Municipal Bond Database (as is our wont)The Observer stumbled upon the quarterly cash receipts of ArenaCo, subsidiary of Forest City Ratner Corporation and the owner operator of Barclays Center. The reports revealed a whopping $46,866,337.14 in sales from tickets, suites and sponsor installments between April 1st, 2012 and September 30th, 2012.
All of which amounts to just a drop in the bucket of the total $510,999,996.50 PILOT Revenue Bond issue currently being paid off by ArenaCo in payments in lieu of taxes to the city or state. This is good news for the bond holders, who presumably need all the help they can get. After all, their bond holdings are currently being given a BBB- rating, the lowest rating a bond issue can have while still being considered investment grade and one which ranks Arena Co and Barclays Center in the same investment strata as the Puerto Rico Aqueduct and Sewer Authority.
It must be difficult to hold onto that kind of debt, especially when your bond issuer is busy in court trying to devalue the very property you’re investing in. An action which Forest City Ranter called a mistake on Friday, according to DNAinfo. It appears that the Atlantic Yards property was inadvertently clumped in with other Forest City Ratner properties. Ones that must still be overvalued by the city finance department but which don’t have any of those pesky bond payments tied to their tax valuations. It all goes to show just how aggressive FCR is when it comes to challenging tax assessments.
So the next time you’re lining up in the Geico Atrium to buy tickets to an event, think of the city, the IRS tax laws it skirted and the hundreds of millions in tax revenue it sacrificed to get you there. A sacrifice that helps all of us, or at least some of us, by buoying a series of barely investment grade bond holdings. It’s a ticket worth the money when a game this great is being played.