Aug. 17 (Bloomberg) -- Newark Mayor Cory Booker said a plan to sell the city’s three-year-old Prudential Center arena is “not feasible,” after two city councilors said the sale could help close a budget gap that was as wide as $150 million.
The $375 million venue, home of the New Jersey Devils National Hockey League team, is owned by the city’s housing authority. It sits adjacent to City Hall, two blocks from Newark Penn Station, a major New Jersey Transit rail hub.
Booker, 41, a Democrat in his second term as head of the state’s largest city, said Newark is in litigation over $3.5 million in annual lease payments from the Devils. Until that case is settled, the city can’t consider a sale “in any real way,” though officials may revisit the idea when the legal issues are resolved, Booker said in a telephone interview.
“There has been absolutely no plan from the council or mayor’s office to sell the arena,” Booker said. “There’s nothing formal right now, other than bouncing ideas around.”
Councilor Ronald Rice said in a June letter to members of the Municipal Budget Committee that the idea is a “radical” one that could save money while bringing in an upfront payment of as much as $80 million.
Luis Quintana, a former vice president of the council who has served on the nine-member body since 1994, said today in a telephone interview that a sale of the 18,000-seat facility might bring $200 million. The arena doesn’t pay taxes or water fees, and transferring it to private ownership would allow Newark to collect both, he said.
‘I’d Be Happy’
“We’re not getting anything from it anyway,” Quintana said. “So anything we can get would be good. If we could get $200 million, I’d be happy.”
Council members are seeking spending cuts and new sources of revenue after they rejected Booker’s plan to borrow against the city’s water system to plug the deficit. The mayor had said his proposal was the only way to prevent police and firefighter layoffs and a property-tax increase of as much as 35 percent.
Council President Donald Payne didn’t return phone calls to his City Hall office.
Booker has said as many as 350 police and firefighters, as well as 600 other city employees, may be fired to make up for $70 million that his $600 million budget for the calendar year counted on from the water deal. The spending plan, which Booker unveiled in June, narrowed a deficit originally estimated at $150 million.
He said in July that he also plans to put city government on a four-day workweek and cut back on nonessential spending, including “everything from toilet paper to printer paper.”
Newark, a city of 280,000 about 13 miles (21 kilometers) west of New York City, had its credit outlook on $500 million in outstanding debt cut to negative on June 2 by Moody’s Investors Service. It lost about $120 million in funding from the state and Port Authority of New York & New Jersey.
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