Tuesday, October 20, 2009

This Thursday’s ESDC Board Meeting (October 22, 2009): Atlantic Yards Is Not on the Agenda Though it Should Be

(Above, the ESDC Board meeting room on September 17, 2009, the date of its last board meeting and its last approval of Atlantic Yards, right before the mega-project changed again substantially. This was pre-publication of Prokhorov information.)

We don't see Atlantic Yards on the agenda for this Thursday's Empire State Development Corporation board meeting (October 22, 2009) though it ought to be. . . for more reasons than one. Just one reason it should be on the agenda is so that, as we have suggested should be the case, the ESDC board can decide whether or not it is going to approve Russian oligarch Mikhail Prokhorov as an integral part of the Atlantic Yards deal, including as the proposed owner of the Nets basketball team and arena. Mr. Prokhorov was proposed as part of the Atlantic Yards deal shortly after the board’s meeting in a seemingly orchestrated fashion. (See: Friday, September 25, 2009, Should Public Agencies Approve Prokhorov as New Nets, Arena and Atlantic Yards Owner?)

We will postpone discussing other reasons Atlantic Yards should reappear on the ESDC board’s agenda for a subsequent post or posts.

ESDC spokesperson, Warner Johnston confirmed to us that Atlantic Yards was not on the agenda and that there were also no plans to put it on. We mentioned Mr. Prokhorov when he asked why it would be. No, he told us, the board has pretty much finished with Atlantic Yards. (He promised to call us if plans change.)

Publicly approving Mr. Prokhorov could be really tough and ESDC would almost certainly like to duck the issue. One sure way to duck the issue is if ESDC waits and the N.B.A. league doesn’t give Mr. Prokhorov league approval to buy the team. That would moot the ESDC’s having to make a decision which would be awkward either way they call it. The New York Times just wrote about the difficulty of the league's approving Mr. Prokhorov and the sort of background review that is necessary. Though it notes that Prokhorov may in the end be viewed as just a “colorful owner” the article takes the time to note more than once in its piece that the information coming out of Russia about Mr. Prokhorov is “all gray.” The billionaire- with a $14 billion net worth at the time- spent five days in jail in connection with importing a planeload of prostitutes, but was released uncharged by the French. The Times asserts that this incident forced Mr. Prokhorov to sell his nickel mine holdings. (See: For Potential Owner, a Background Check Worthy of the K.G.B. By Richard Sandomir, October 18, 2009.)

One paragraph from the Times article:
David E. Hoffman, the author of “The Oligarchs: Wealth and Power in the New Russia,” said that men like Prokhorov emerged from a business climate that had “no rule of law, a lot of shadiness, a lot of violence and coercion.”
If the league does approve Prokhorov then, by virtue of having waited, ESDC can try to minimize its own embarrassment by piggybacking on that approval.

It is also quite possible that ESDC will try to sidestep the Prokhorov issue entirely by doing nothing, (as if that is appropriate). This is perhaps what Mr. Johnston meant when he said that ESDC’s board was pretty much done dealing with Atlantic Yards.

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