Senator and Developer Hope to Keep Nets in New Jersey
enator Jon S. Corzine of New Jersey and a major real estate developer have joined forces to try to buy the Nets in an effort to prevent them from moving to a new home in Brooklyn, according to several people on both sides of the Hudson River involved in negotiations with the team.
The bid by Corzine and the developer, Charles Kushner, is only the latest development in an intense bistate tug of war over the Nets. State officials in New Jersey want the team to move to Newark, or stay in its current home at the Meadowlands in East Rutherford, N.J.
Corzine, a former chairman of Goldman Sachs investment bank, and Kushner, chairman of one of the largest privately owned real estate companies in the country, have been talking to some owners of the Nets and reviewing the team's financial records in preparation for a bid that could come as early as this week, the executives said.
The owners of the Nets have been negotiating to move the team, as well as the Devils, to a new $355 million arena in Newark. But the talks have been stalled for months over the team's request for additional financial aid from New Jersey and the City of Newark, which have already committed $210 million to the project. The Nets and the Yankees are two of the major assets of the YankeeNets holding company, which is currently riven with disputes between the owners of the two teams and which may not survive much longer. The holding company would almost certainly be dissolved if the Nets were sold.
Corzine's office in Washington said that Corzine, a Democrat serving his first term, was on vacation and unavailable for comment. Kushner, whose company is based in Florham Park, N.J., did not return calls requesting comment. But three people who have been involved with the negotiations in New York or New Jersey said that Corzine joined the fray within the past week.
In recent weeks, Lewis Katz, a wealthy New Jersey investor and a principal owner of the Nets and the Devils, has been working with the developer Bruce Ratner on a deal to build a new arena for the teams at the intersection of Atlantic and Flatbush Avenues in Brooklyn, where it would serve as the centerpiece of a sprawling 21-acre real estate development that would include housing and office space.
Ratner and New York City officials have been working frantically on the proposed project, but no deal has been struck. Deputy Mayor Daniel L. Doctoroff has said he was interested in the project, but the city is still evaluating its financial viability. Under the terms of the proposed deal with the Nets, Ratner is trying to raise $75 million from investors to buy a stake in the team.
Convinced that, in the words of one New Jersey official, "the Brooklyn deal is real," Corzine has joined Kushner in an effort to keep the teams in New Jersey, whether it is in Newark or in the Meadowlands. Kushner has been working with Raymond Chambers, another owner of the Nets, who is committed to moving the team to Newark.
Another executive, who has talked with Corzine and Kushner, said Corzine was "somebody who'll buy the Nets for the sole purpose of keeping them in Jersey.''
"Our competition is this guy Ratner, who's willing to put up a ton of money," the executive said. "He claims to have New York City officials willing to give him a huge subsidy."
Gov. James McGreevey's office in Trenton said that it was unaware that Corzine had an interest in the teams. McGreevey previously nominated Kushner to be chairman of the Port Authority of New York and New Jersey but Kushner later withdrew his name after Republicans complained that he violated campaign finance laws while donating money to McGreevey and other Democrats.
Corzine would not be the first United States senator to own a professional basketball team. Senator Herbert Kohl, a Democrat from Wisconsin, owns the Milwaukee Bucks, although Kohl bought the team in 1985, before he was elected to the first of his three terms in office. Kohl has not put the Bucks in a blind trust and has taken an active role in running the team. It is unclear whether Corzine would put his stake in a blind trust, or be involved in politically volatile issues like demanding subsidies from the state for a new arena.
"Corzine is not buying into this team because he thinks he's going to make money," said the executive who talked with Corzine and Kushner. ''It's to save the teams from leaving New Jersey and maybe to generate political support."
Mayor Sharpe James of Newark and McGreevey have been working with Chambers to revive the arena project in Newark. McGreevey has also directed the New Jersey Sports and Exposition Authority to work out a fallback position, involving the renovation of Continental Arena, the current home of the Nets and the Devils. The authority recently hired architects and planners to develop some proposals and cost estimates.
The current crisis is sparked in part by the fact that Chambers and Katz, who own 70 percent of the Devils (the remainder is owned by YankeeNets), must pay the former Devils owner John McMullen $50 million on Friday as a final payment for the team. Despite winning the Stanley Cup for the third time in eight years, the Devils continue to lose as much as $25 million a year and rank near the bottom of the league in attendance. The Nets, who advanced to the National Basketball Association finals the last two seasons, also draw relatively poorly but do not lose as much money.
Ratner's Brooklyn deal would involve using his money to paying off the $50 million note to McMullen and putting up money to cover future operating losses for the Devils and the Nets. But he faces obstacles, particularly because the project involves building over a rail yard owned by the Metropolitan Transportation Authority. Ratner wants the authority to donate the land, while some senior M.T.A. officials maintain that the authority must be paid.