NYC Cuts New Deal To Redevelop Willets Point With Mets Owners

New York City has cut a new deal to redevelop Willets Point with the Mets ownership group. Willets Point has long been eyed for redevelopment. It's a neighborhood that is largely off the grid - it lacks sewer hookups and is a warren of junkyards and repair shops in the shadow of the gleaming new CitiField. Since construction got underway to build the stadium a few years back, Mayor Bloomberg had looked to get the redevelopment going.

Those efforts had stalled until now.

A new deal between the Bloomberg administration and a group of developers, including the owners of the Mets, will call for the remediation and redevelopment of a 20-acre area of the blighted neighborhood next to Citi Field, adding retail and ultimately new housing in a time frame that extends past an initial proposed 10-year plan, a person familiar with the agreement told The Associated Press.

The person requested anonymity because the person was not authorized to discuss the matter ahead of an announcement.

Under the agreement, the developers, Related Companies and Sterling Equities, would clean up the area and construct a mall on the west side of the ballpark. A 200-room hotel and “two retail strips” are part of the plan for the opposite end of the stadium, the New York Times reported.

Then, no later than 2025, they would start construction on a mixed-use component that would include housing and measure anywhere from 1.3 million square feet up to 4.5 million square feet. The founders of Sterling Equities are Fred Wilpon and Saul Katz, the owners of the Mets.

The redevelopment of the area, currently populated by auto-repair shops and junkyards and lacking infrastructure as basic as sewers, has long been a goal of Mayor Michael Bloomberg’s. In 2007, he announced a 10-year initiative that would bring homes and commercial space to the area.

The new agreement extends past that period, but the person speaking to the AP said that by the original end point of 2017, much would have been done including the vital first step of cleaning the area up and construction of some of the retail spaces.

Sterling Equities is run by Mets owners Fred Wilpon and Saul Katz, both of whom are embroiled in the ongoing fallout of the Bernie Madoff Ponzi scheme that defrauded investors. The Wilpons have been claiming that they were as much victims of the scam as everyone else, but the trustee has targeted funds owned by the Wilpons for reimbursing other victims.

The Mets have had a serious cash crunch for the better part of the past couple of years, and it's limited their ability to field competitive teams. They've also sold off minority ownership shares to investors to help raise funds for operations on and off the field.

So, how is it that the City thinks that Sterling Equities is in a financial position to make any of this happen?

One has to wonder whether they're actually going to be putting up any money of their own and are instead hoping for others to pay the way for them to move ahead on a deal that would benefit them financially in the long run.

Related Companies has deep pockets, and their real estate ventures includes getting another one of Bloomberg's pet redevelopment projects underway - the Hudson Yards. They've got the ability to get this done and they have the experience to build out combined retail and commercial space.

It would be really interesting and insightful to figure out the real working relationship here - and how it is structured.

Mets Ownership Sells Minority Stake

Who's the lucky ones who are buying a minority stake in the New York Mets sports operation? It would be David Einhorn, who is president of Greenlight Capital Inc., who's buying a $200 million stake in the team.

Now they have the headache of dealing with majority owners Jeff and Fred Wilpon who are continuing to deal with the fallout from the Madoff Ponzi scheme and their poorly chosen comments slamming players on the team (even if the comments are largely accurate).

Fred Wilpon Is a Schmuck

Fred Wilpon is once again making waves today (HT: anonymous emailer). Wilpon and his son Jeff have been under fire for his ongoing and close relationship to Ponzi schemer Bernie Madoff, and the Mets organization may not have sufficient funds to pay the bills. The Wilpons have been looking to sell a minority stake in the team, but today Wilpon decided to take pot shots at some of his marquee players.

Specifically, he rips into Jose Reyes, David Wright, and Carlos Beltran.

On right fielder Carlos Beltran, Wilpon mentions Beltran's huge postseason with the Houston Astros in 2004 and says, referring to himself: "We had some schmuck in New York who paid him based on that one series. He's 65 to 70 percent of what he was."

That's right. Wilpon paid crazy money for a guy who has never lived up to that one playoff series. Wilpon is the schmuck who paid out that deal.

Then, Wilpon goes after David Wright, who is currently nursing a stress fracture in his back, claiming he's a nice player but not a superstar. If there's anyone on the team who doesn't deserve to be bashed, it's Wright. He's played hard from day one and is a class act. Kicking Wright while he's down is no way to act.

He then savages Jose Reyes over his upcoming contract talks, claiming that Reyes will seek Carl Crawford type money. Well, on that front Wilpon's probably right. Reyes doesn't deserve Crawford-type money (7 years, $140 million). Crawford probably doesn't deserve that kind of money and I'm no fan of those kinds of long term deals because the players all too frequently can't live up to the expectations of those deals and injuries can curtail production. In Reyes' case, he's had an injury prone career to date, and he always seems to be one or two at bats away from being back on the DL for another assorted injury.

UPDATE:
The quotes are from a much larger piece in The New Yorker.

Dark Days Ahead For Mets Ownership

The Wilpons are in huge trouble. They've been denying that their financial situation was adversely affected by the Madoff scandal, but revelations in the past 48 hours shows a significantly different picture.

It suggests that the Wilpons made out like bandits for being associated with Bernard Madoff and that the Met organization's financial situation was tied to Madoff.

Now, however, a lawsuit against Mr. Wilpon and Mr. Katz brought by the trustee for victims of Mr. Madoff has suggested the relationship — financially and personally — was deeper than anyone might have suspected. The trustee, Irving H. Picard, has alleged that the two men’s dealings with Mr. Madoff were extensive and longstanding, and that they went on even after suspicions about Mr. Madoff’s operation were raised, according to two lawyers involved in the case.

As a result, according to the lawyers, Mr. Picard has asserted that Mr. Wilpon and Mr. Katz either knew or should have known that Mr. Madoff’s operation was a potential fraud. Mr. Wilpon, Mr. Katz and their lawyers have refused to comment on the lawsuit, which was filed under seal in December in federal bankruptcy court in Manhattan.

But interviews with current and former associates of Mr. Wilpon and Mr. Katz, as well as former employees of the club, former employees of Mr. Madoff and others, make it clear that the relationship was substantial and that the role Mr. Madoff played in the financial life of the ball club and the Wilpon and Katz families was pervasive.

“The relationship between Fred and Bernie became closer and closer because Bernie was returning more and more to Fred in terms of his investments while Bernie is getting exposure from Fred and Saul,” said Jerry Reisman, a lawyer in Garden City, N.Y., who has represented 10 or so commercial real estate investors who lost a total of some $150 million to Mr. Madoff.

“They both relied on one another,” he said. “It was reciprocal, symbiotic. They both relied on each other for money, and Bernie also relied on Fred for contacts.”

One former executive with the Mets recalled how it could work:

“I remember vividly Madoff’s name being brought up a lot when” the team “would negotiate contracts, particularly with deferments,” said the former executive, who would not be identified because he did not want to harm his career in baseball. “That money would be turned over to Madoff.

“And as part of friends and family of the Mets, they offered people the opportunity to invest in Bernie. There was talk about Bernie averaging like 15 percent for the Wilpons. It just seemed too good to be true, but then you think the owner has vetted it.”

Frank Cashen, the former general manager of the Mets who built the team that won the 1986 World Series, said it was his understanding that several million dollars of his deferred compensation had been invested with Mr. Madoff, but that he had been paid. Asked whether it was Mr. Wilpon or Mr. Katz who was more likely to push the idea of investing with Mr. Madoff, Mr. Cashen, who stepped down as general manager in 1991, said, “To me, they operated in unison.”

If Cashen's statements can be corroborated by the evidence, and there's further evidence that the Wilpons shilled for Madoff, we may yet see the Wilpons perp-walked for their involvement in the Ponzi scheme.

What does this mean for the Mets organization? It may result in a sale of the entire team, rather than just a fractional share as the Wilpons announced earlier this week. The last thing that baseball, and the Mets, needs is for the team to be embroiled in a major financial/criminal scandal.

Mets GM Sandy Alderson says that the situation wont affect the Mets on the field, but that's just putting a spin on things. The financial situation is tenuous at best, and Alderson is limited as to how much money he can spend on bringing players to New York because of the situation. Players may also be shying away from the Mets because of the unsettled financial situation.

It will take time to untangle the financial holdings of all the parties involved, but if this means the end of the Wilpons' ownership of the Mets, I think that Met fans would cheer heartily.

Tremendous Interest in Buying the Mets

It should come as no surprise that there's quite a bit of interest in buying the share of the Mets that the Wilpons are looking to sell.

The Wilpons, who are the Mets owners, have themselves some huge financial trouble because of some guy named Bernie Madoff (the trustee looking to make those scammed whole are now looking to recoup money from the Wilpons), so they've finally realized that they have to sell a portion of the team to raise funds to deal with possible lawsuits. They're looking to sell 20-25%.

One of the people expressing an interest? Martin Luther King, III - MLK Jr's son. King is part of a group including former Met greats like Ed Kranepool and Donn Clendenon's son.

The New York Post reported Sunday that Martin Luther King III is part of a bid that includes former Mets first baseman Ed Kranepool, Donn Clendenon Jr. and television executive Larry Meli. Clendenon's father was MVP of the Mets' 1969 World Series victory.

Meli said that King, who runs the King Center in Atlanta, is coming to New York this week to meet with Mets owner Fred Wilpon and his son, CEO Jeff Wilpon.

The Wilpons said Friday that they were looking to sell a 20 percent to 25 percent interest in the team. The announcement came after they were named in a lawsuit from the trustee trying to reclaim money for the victims of the Bernard Madoff swindle.