Forest City Subsidiary and Onexim Group Announce Partnership for NBA Nets and Brooklyn Project
CLEVELAND, BROOKLYN, N.Y. and MOSCOW, Sept. 23 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced that its New York-based subsidiary, Forest City Ratner Companies, Inc. ("FCRC") and Nets Sports and Entertainment ("NSE"), have signed a letter of intent with an affiliate of Onexim Group, an international private investment fund, to create a strategic partnership for the development of the Atlantic Yards project, a 22-acre residential and commercial real estate project in Brooklyn, and the Barclays Center arena, the future home of the NBA's Nets.
The partnership will help ensure achievement of Forest City's goals of bringing the economic and housing benefits of the Atlantic Yards Project to Brooklyn, creating a world-class sports and entertainment venue, and relocating the Nets basketball team.
As part of the agreement, entities to be formed by Onexim Group will 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 will develop the non-arena real estate. Forest City will retain a minority ownership stake in the Nets, and will be managing partner of the arena and majority owner of the balance of the Atlantic Yards real estate.
Bruce Ratner, chairman and chief executive officer of FCRC, said, "Mikhail Prokhorov and Onexim will be great partners for this project. Our company has a long-standing commitment to Brooklyn, and I am thrilled that smart global investors appreciate the exciting economic potential here. We are one step closer to achieving our goals of creating much needed jobs and economic development for Brooklyn and the city."
Mikhail Prokhorov, president of Onexim Group, said, "We are delighted to join in this exciting project and to participate in the landmark development of global sports in this entertainment arena in the heart of New York City. I have a long-standing passion for basketball and pursuing interests that forward the development of the sport in Russia. I look forward to becoming a member of the NBA and working with Bruce and his talented team to bring the Nets to Brooklyn."
NBA Commissioner David Stern said, "We are looking forward to the Nets' move to a state-of-the-art facility in Brooklyn, with its rich sports heritage. Interest in basketball and the NBA is growing rapidly on a global basis and we are especially encouraged by Mr. Prokhorov's commitment to the Nets and the opportunity it presents to continue the growth of basketball in Russia."
The transaction is expected to close by the first quarter of next year upon certain conditions being fulfilled, including approval by the NBA's Board of Governors. The Raine Group and Goldman, Sachs & Co. advised FCRC and NSE. Simpson Thacher & Bartlett LLP acted as legal counsel to FCRC and NSE. Hogan & Hartson advised Onexim Group.