$300M Downtown Arena Gets a Jumpstart

Under the terms of the pending agreement, which still has to go to the planning board for public hearings, the city would pay two-thirds of the estimated $300 million cost of building the facility, with the Devils paying the rest. The city's money would largely come from rent it collects from the Port Authority of NY/NJ for Newark Liberty International Airport. The Devils would pay an annual rent for using the city-owned facility, but city taxes collected on the arena and surrounding area would largely offset that rent, according to officials.

"With the signing of this historic agreement, we are looking forward to thousands of construction jobs and permanent jobs," Newark Mayor Sharpe James said in a written statement.

What's different from earlier proposals for the arena, which went on life support because of an inability to get everyone, including the state, to sign off on a funding package, is that the NBA's New Jersey Nets are conspicuous by their absence. The franchise was sold recently by owner YankeeNets to a partnership headed by developer Bruce Ratner, who plans to move the team to Brooklyn, NY instead. The Devils, separately owned by a group of YankeeNets partners, are about to be acquired by a group headed by current minority owner Jeffrey Vanderbeek.

The location has moved as well. The new site is near the intersection of Broad and Market streets in the heart of Downtown, compared to the previous site along Mulberry Street. A key difference is that the new site is city-owned, which could facilitate the project compared to the previous site, which had multiple ownership and would have required condemnation proceedings.

The biggest difference of all is the size and scope of the project. Rather than being part of an entertainment district, as previously proposed, the arena would be the centerpiece of a $1 billion makeover of Downtown Newark. The master plan for the Downtown Core Redevelopment District, which is scheduled to be formally unveiled later this week, would encompass some four million sf of office space, 500,000 sf of new retail and entertainment space, a 300-room hotel, 3,500 parking spaces and a new building to house city government. City officials say they will name a master developer in the near future.

Local officials estimate that the overall project could return as much as $670 million to the city's coffers over the 30-year term of the lease the Devils would be required to sign. New job estimates are in the 14,000 range.

Hurdles remain, including what to do with the Continental Airlines Arena--a highly charged political issue in the state. And the city's plan to use tax-increment financing for the project will likely need to be approved by the state legislature.