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Barclays Center Project POS

Barclays Center Project POS

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Published by: Eliot Brown / New York Observer on Dec 03, 2009
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      T      h      i     s      P     r     e      l      i     m      i     n     a     r     y      O      f      f      i     c      i     a      l      S      t     a      t     e     m     e     n      t     a     n      d      t      h     e      i     n      f     o     r     m     a      t      i     o     n     c     o     n      t     a      i     n     e      d      h     e     r     e      i     n     a     r     e     s     u      b      j     e     c      t      t     o     c     o     m     p      l     e      t      i     o     n     o     r     a     m     e     n      d     m     e     n      t .      U     n      d     e     r     n     o     c      i     r     c     u     m     s      t     a     n     c     e     s     s      h     a      l      l      t      h      i     s      P     r     e      l      i     m      i     n     a     r     y      O      f      f      i     c      i     a      l      S      t     a      t     e     m     e     n      t     c     o     n     s      t      i      t     u      t     e     a     n     o      f      f     e     r      t     o     s     e      l      l     o     r      t      h     e     s     o      l      i     c      i      t     a      t      i     o     n     o      f     a     n     o      f      f     e     r      t     o      b     u     y ,     n     o     r     s      h     a      l      l      t      h     e     r     e      b     e     a     n     y     s     a      l     e ,     o      f      t      h     e     s     e     s     e     c     u     r      i      t      i     e     s      i     n     a     n     y      j     u     r      i     s      d      i     c      t      i     o     n      i     n     w      h      i     c      h     s     u     c      h     o      f      f     e     r ,     s     o      l      i     c      i      t     a      t      i     o     n     o     r     s     a      l     e     w     o     u      l      d      b     e     u     n      l     a     w      f     u      l     p     r      i     o     r      t     o     r     e     g      i     s      t     r     a      t      i     o     n     o     r     q     u     a      l      i      f      i     c     a      t      i     o     n     u     n      d     e     r      t      h     e     s     e     c     u     r      i      t      i     e     s      l     a     w     s     o      f     a     n     y     s     u     c      h      j     u     r      i     s      d      i     c      t      i     o     n .
PRELIMINARYOFFICIALSTATEMENTDATEDDECEMBER2,2009
NEWISSUE—BOOK-ENTRYONLY RATINGS:
See “RATINGS”
In the opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C., Bond Counsel, under existing law, and assuming continuing compliance with the Internal Revenue Code of 1986, as amended (the “Code”), interest on the Series 2009 PILOT Bonds will not be included in gross income of holders of the Series 2009 PILOT Bonds for federal income tax purposes. Interest on the Series 2009 PILOT Bonds will not constitute a tax preference item for purposes of computation of the alternative minimum tax imposed on individuals and corporations and will not be included in adjusted current earnings when calculating corporate alternative minimum taxable income. Under existing law, interest on the Series 2009 PILOT Bonds is exempt from personal income taxes imposed by the State of New York and its political subdivisions, including The City of New York, to the extent that such interest is excluded from gross income for federal income tax purposes. See “TAX MATTERS” herein.
$500,000,000*BrooklynArenaLocalDevelopmentCorporationPILOTRevenueBonds,Series2009(BarclaysCenterProject)
Dated:DateofDeliveryDue:Asshownontheinsidefrontcover
The Brooklyn Arena Local Development Corporation (the “
Issuer 
”) is offering $500,000,000* of its PILOT Revenue Bonds, Series 2009 (Barclays CenterProject) (the “
Series 2009 PILOT Bonds 
”), certain proceeds of which Series 2009 PILOT Bonds, together with certain other moneys, will be used to paythe costs of the Arena Project. The Series 2009 PILOT Bonds are being issued for the purposes of: (i) providing a portion of the costs of acquisition andconstruction of the Arena Project, (ii) funding the Series 2009 PILOT Bonds Debt Service Reserve Subaccount in the amount of the Senior PILOTBonds Debt Service Reserve Account Requirement for the Series 2009 PILOT Bonds; (iii) funding, in whole or in part, the Series 2009 PILOT BondsStrike Reserve Subaccount in the amount of the Senior PILOT Bonds Strike Reserve Account Requirement for the Series 2009 PILOT Bonds;(iv) paying capitalized interest on the Series 2009 PILOT Bonds from the Arena Project Effective Date (as such term is defined in the CommencementAgreement) through May 15, 2012
*
, and (v) reimbursing certain Costs of Issuance. See “PLAN OF FINANCE.”The “
Arena Project 
” is comprised of the design, development, acquisition, construction and equipping of an arena (the “
Arena 
”) and certain otherimprovements related to the Arena (the “
Arena Infrastructure 
”) in the Atlantic Terminal area of Brooklyn, New York, to be used as the home venue of theprofessional basketball team currently known as the New Jersey Nets (the “
Nets 
”) and as a venue for other entertainment, cultural, sporting and civicevents. See “THE ARENA PROJECT.”Funds to pay a portion of the costs of acquisition and construction of the Arena Project have been and will be provided for by ArenaCo and/or will bederived from one or more other related sources. Funds to pay certain costs of the Arena Project have been and will be provided for by The City of NewYork (the “
City 
”), acting through the New York City Economic Development Corporation (“
NYCEDC 
”), through a capital contribution. Funds to paycertain costs relating to items of Atlantic Yards Project infrastructure, including a portion of the Related Infrastructure, but not of the Arena Project, havebeen and will be provided for by The State of New York (the “
State 
”), acting through the New York State Urban Development Corporation d/b/a EmpireState Development Corporation (“
ESDC 
”) through a capital contribution. See “PLAN OF FINANCE.”The Series 2009 PILOT Bonds are special limited obligations of the Issuer, the principal of and premium, if any, and interest on which are payable solelyout of and secured by (i) revenues of the Issuer derived and to be derived from certain payments in lieu of
ad valorem 
real estate taxes (“
PILOTs 
”) to bemade under a Payment-in-Lieu-of-Tax Agreement (the “
PILOT Agreement 
”), among the Issuer, Brooklyn Events Center, LLC, a Delaware limited liabilitycompany (“
ArenaCo 
”), the City and ESDC; (ii) all right, title and interest of The Bank of New York Mellon (the “
PILOT Bond Trustee 
”) in certain fundsand accounts held by The Bank of New York Mellon (the “
PILOT Trustee 
”) under the PILOT Assignment and Escrow Agreement (the “
PILOT Assignment 
”), among ESDC, the Issuer, the PILOT Bond Trustee, the PILOT Trustee and the City; and (iii) all right, title and interest of the PILOT BondTrustee in certain funds and accounts to be held by the PILOT Bond Trustee under the Master PILOT Indenture of Trust, dated as of December 1, 2009(the “
Master PILOT Indenture 
”), by and between the Issuer and the PILOT Bond Trustee and the First Supplemental PILOT Indenture of Trust, by andbetween the Issuer and the PILOT Bond Trustee, dated as of December 1, 2009 (the “
First Supplemental PILOT Indenture 
” and, together with theMaster PILOT Indenture, the “
PILOT Bonds Indenture 
”). ArenaCo is a newly-formed and wholly-owned subsidiary of Brooklyn Arena Holding Company,LLC, a Delaware limited liability company (“
Arena HoldCo 
”), which in turn is a newly-formed and wholly-owned subsidiary of Brooklyn Arena, LLC, aDelaware limited liability company (the “
Arena Developer 
”). See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 PILOT BONDS.”The Series 2009 PILOT Bonds will be issuable as current interest bonds (the “
Series 2009 Current Interest PILOT Bonds 
”) and as capital appreciationbonds (the “
Series 2009 Capital Appreciation PILOT Bonds 
”). Interest on the Series 2009 Current Interest PILOT Bonds is payable on each January 15and July 15, commencing July 15, 2010. The inside cover page of this Official Statement contains information concerning the maturity dates, interestrates, prices or yields and CUSIPs for the Series 2009 PILOT Bonds.The Series 2009 PILOT Bonds will be subject to redemption prior to maturity, including, under certain circumstances, extraordinary mandatoryredemption, all as more fully described herein. See “INTRODUCTION—Commencement Agreement” and “THE SERIES 2009 PILOT BONDS—Redemption.”The Series 2009 PILOT Bonds will be issued in authorized denominations of $5,000 or any integral multiple thereof. The Series 2009 PILOT Bonds willbe held initially in book-entry only form, registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, NewYork, New York (“
DTC 
”), which will act as securities depository for the Series 2009 PILOT Bonds. Individual purchases of beneficial interests in theSeries 2009 PILOT Bonds will be made in book-entry form under DTC’s book-entry only system. Purchasers of beneficial interests in the Series 2009PILOT Bonds will not receive certificates representing their interests in the Series 2009 PILOT Bonds. So long as Cede & Co. is the registered owner ofthe Series 2009 PILOT Bonds, payments of principal of and premium, if any, and interest on the Series 2009 PILOT Bonds will be paid through thefacilities of DTC. Disbursement of such payments to DTC participants is the responsibility of DTC, and disbursement of such payments to thepurchasers of beneficial interests in the Series 2009 PILOT Bonds is the responsibility of DTC participants and indirect participants, as more fullydescribed herein. See “THE SERIES 2009 PILOT BONDS—General” and “APPENDIX A—BOOK-ENTRY ONLY SYSTEM.”
THESERIES2009PILOTBONDSARESPECIALLIMITEDOBLIGATIONSOFTHEISSUERPAYABLESOLELYFROMANDSECUREDBYPILOTREVENUESDERIVEDFROMPILOTSMADEBYARENACOPURSUANTTOTHEPILOTAGREEMENT,THEINTERESTOFTHEPILOTBONDTRUSTEEINTHEDEBTSERVICEANDREIMBURSEMENTFUNDUNDERTHEPILOTASSIGNMENTANDCERTAINFUNDSANDACCOUNTSHELDBYTHEPILOTBONDTRUSTEEUNDERTHEPILOTBONDSINDENTURE.NONEOFTHESTATE,THECITYANDESDCISORSHALLBEOBLIGATEDTOPAYTHEPRINCIPALOFANDPREMIUM,IFANY,ORINTERESTONTHESERIES2009PILOTBONDS,ANDNEITHERTHEFAITHANDCREDITNORTHETAXINGPOWEROFTHESTATEORTHECITYISPLEDGEDTOSUCHPAYMENT.THEISSUERHASNOTAXINGPOWER.THESERIES2009PILOTBONDSDONOTCONSTITUTEANOBLIGATIONOFARENACO,THEARENADEVELOPER,NEWJERSEYBASKETBALL,ORANYOFTHEIRRESPECTIVEAFFILIATES.THESERIES2009PILOTBONDSARENOTSECUREDBYANYINTERESTINANYPORTIONOFTHEATLANTICYARDSPROJECT(INCLUDINGTHEARENAPROJECT)NORANYPROPERTYOFORINTERESTINARENACO,THEARENADEVELOPER,NEWJERSEYBASKETBALL,ORANYOFTHEIRRESPECTIVEAFFILIATES.AninvestmentintheSeries2009PILOTBondsinvolvescertainrisksasdescribedherein.Seetheinformationprovidedundertheheadings“RISKFACTORSANDINVESTMENTCONSIDERATIONS”inthisOfficialStatement.
The Series 2009 PILOT Bonds are offered by the underwriters set forth below (collectively, the “
Underwriters 
”), subject to prior sale, when, as and ifdelivered to and accepted by the Underwriters, subject to the approval of the proceedings authorizing the Series 2009 PILOT Bonds, and certain othermatters, by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C., Bond Counsel. Certain legal matters will be passed upon for ArenaCo, the ArenaDeveloper and New Jersey Basketball by Fried, Frank, Harris, Shriver & Jacobson LLP, Edwards Angell Palmer & Dodge LLP, Richards, Layton &Finger, P.A., and Kelley Drye & Warren LLP; for the Issuer and ESDC by ESDC’s General Counsel; and for the Underwriters by Nixon Peabody LLP. Itis expected that the Series 2009 PILOT Bonds will be available for delivery through the services of DTC on or about December 23, 2009.
Goldman,Sachs&Co.BarclaysCapital
Citi
Dated: , 2009* Preliminary, subject to change.
 
$500,000,000*Brooklyn Arena Local Development CorporationPILOT Revenue Bonds, Series 2009(Barclays Center Project)
 
$473,000,000* CURRENT INTEREST BONDS
Maturity Date(July 15)Principal AmountInterest Rate Price or Yield CUSIPs
(†)
 
$______ ____% per annum Term Bonds Due July 15, 20__ Yield ___%; CUSIP
(1)
 ________ 
 
$______ ____% per annum Term Bonds Due July 15, 20__ Yield ___%; CUSIP
(1)
 ________ 
 
$______ ____% per annum Term Bonds Due July 15, 20__ Yield ___%; CUSIP
(1)
 ________ 
 
$______ ____% per annum Term Bonds Due July 15, 20__ Yield ___%; CUSIP
(1)
 ________ 
 
$27,000,000* CAPITAL APPRECIATION BONDS
MaturityDate(July 15)InitialPrincipalAmountAccretedValue atMaturityDateInitialAmountper $5,000AccretedValue atMaturityYield toMaturityDate CUSIPs
(†)
2041204220432044204520462047
 ________________________________ 
* Preliminary, subject to change.
(†)
CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by Standard &Poor’s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. CUSIP numbers have been assigned by anindependent company not affiliated with the Issuer and are included solely for the convenience of the holders of the Series 2009PILOT Bonds. The Issuer is not responsible for the selection or uses of these CUSIP numbers, nor is any representation made asto their correctness on the Series 2009 PILOT Bonds or as indicated above.
 
 
   V   i   e   w    f   r   o   m    A   t   l   a   n   t   i   c   A   v   e   n   u   e   l   o   o   k   i   n   g   S   o   u   t   h
   a   t   A   t    l   a   n   t    i   c   Y   a   r    d   s
    /    B   r   o   o    k    l   y   n ,    N    Y
   B   A   R   C   L   A   Y   S   C   E   N   T   E   R

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