Row grows in Brooklyn over Barclays' Nets deal

By Stephen Foley
Friday 27 March 2009 01:00

Angry New Yorkers are urging the crusading state attorney-general, Andrew Cuomo, to block Barclays' $300m-plus deal for naming rights to a new basketball stadium in Brooklyn, after the UK bank received taxpayer money through AIG.

Barclays was one of the major trading partners of AIG's collapsed derivatives business, and received $8.5bn (£5.9bn) after the US government moved to prevent the insurer from defaulting on its liabilities.

Opponents of the development project say that Barclays should not be using public money for a "vanity project", and are hoping to stir up a similar outcry to that which greeted Citigroup's $400m sponsorship of the New York Mets' new baseball stadium.

"The federal bailout of AIG was not intended to assist Barclays in hyping its brand in Brooklyn, or to help them slap their logo, for 20 years, no less, on a basketball arena already heavily dependent on city, state and federal subsidies," said Daniel Goldstein of the campaign group Develop Don't Destroy Brooklyn.

The group has urged its members to contact Mr Cuomo – who led the political pressure on AIG executives to hand back bonuses this month – in the hope that he will take up the cause. Mr Cuomo was yesterday continuing his campaign against AIG, issuing subpoenas to examine its trading relationships and business practices.

The basketball arena at Barclays Center will be the new home for the New Jersey Nets, and forms the central part of a $4bn Frank Gehry-designed complex that includes 16 skyscrapers. Barclays unveiled the deal with fanfare in 2007, rolling out the rapper and Nets backer Jay-Z and New York City's Mayor, Michael Bloomberg. The deal is a 20-year commitment, originally valued between $300m and $400m, but the bank is believed to have renegotiated the cost down since then.

Barclays said last night that it has not directly received any government money, since AIG was only meeting its obligations to the bank, and that it remains committed to the project.

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